The shared currency was pressured by disappointing economic data out of Germany
The euro retains a bullish tone on Monday as the US dollar stays pressured across the market, extending its retreat from multi-year peaks seen above 109.00 last month. EURUSD is holding above the 1.0200 figure at the start of a new week and the month, but still lacks the upside momentum to see a more robust ascent even as the descending 20-DMA has turned into support.
Earlier in the day, the shared currency was pressured by disappointing economic data out of Germany. Retail sales in the Eurozone’s largest economy contracted by 1.6% on a monthly basis in June versus the expected gain of 0.2% and +0.6% last. On an annualized basis, retail sales came in at -8.8% versus -8.0% expected. However, the market reaction to the release was short-lived due to the fact that the data was already factored into the disappointing second-quarter GDP report revealed last week. As a reminder, Germany’s economy stagnated in the second quarter after posting 0.8% growth in January-March.
The EURUSD pair could make fresh bullish attempts this week should the dollar continue to retreat, with investors shifting focus towards the US service and manufacturing ISM PMIs along with the key event of the week in the form of the NFP employment report due on Friday. Should the US economy continue to signal further weakness, the USD index may threaten the 105.00 mark that represents the immediate significant support for the greenback.
In the immediate term, the buck needs to hold above the 105.50 zone in order to refrain from deeper losses. Should this region withstand the pressure, the common currency may stay within a consolidation phase above 1.0200. The pair needs to make a decisive break above 1.0280 so that to challenge the 1.0300 barrier at this stage.