Eurodollar jumps above 1.17 after weak US University of Michigan data 📌
The EUR/USD is up more than 0.5% today, approaching a local resistance zone, fueled by weakness in the U.S. dollar. Meanwhile, sentiment on Wall Street deteriorated following the release of University of Michigan data, which showed disappointingly weaker consumer confidence alongside rising inflation expectations in the U.S. economy.
Similarly, July retail sales and industrial production came in slightly below expectations. This, combined with the “dangerous” mix of weak consumer sentiment and rising inflation expectations (five-year outlook near 5%), places the Federal Reserve in a challenging position. On one hand, it reduces the likelihood of faster rate cuts; on the other, keeping rates elevated could cause an even sharper deterioration in household sentiment.
U.S. July Retail Sales: 0.5% m/m vs forecast 0.6% vs previous 0.6%
- Core retail sales: 0.3% m/m vs forecast 0.3% vs previous 0.5%
- Export prices: 0.1% m/m vs forecast 0.1% vs previous 0.5%
- Import prices: 0.5% m/m vs forecast 0.1% vs previous 0.1%
NY Fed Manufacturing (August): 11.5 vs forecast 0 vs previous 5.5
U.S. Industrial Production (preliminary, July): -0.1% m/m vs forecast 0% vs previous 0.3% in June
U.S. University of Michigan Consumer Sentiment (preliminary, August): 58.6 vs forecast 62 vs previous 61.7
- Current conditions index: 60.9 vs forecast 67.5 vs previous 68
- Expectations index: 57.2 vs forecast 58.4 vs previous 57.7
- 1-year inflation expectations: 3.9% vs forecast 3.4% vs previous 3.4%
- 5-year inflation expectations: 4.9% vs forecast 4.5% vs previous 4% in July
EUR/USD (D1 chart)
The pair has rebounded from the 50-day EMA on the daily timeframe and is trading above 1.171 today. Trading volume is showing a slight decline.
Source: xStation5
EUR/USD (H1 chart)
Source: xStation5
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