Although the numbers came in worse than expected at 1.2%, all signs still point to a full recovery in the retail sales activity. We are seeing spending levels back to record highs but be mindful that as stimulus pull back, people will be less likely to spend on a new TV and start sending it back to the struggling services sector.
With US retail sales missing their mark for the month of July, we see the Euro is trading at around 1.1830. We are seeing some strong technical indicators at these levels. But strong resistance in a short term chart wont allow for an easy move to 1.1900. seeing a solid break past this would give us some comfort that the sentiment has turned bullish. The focus would then shift to the psychological level at 1.2000 but not before testing 1.1975.
However, a break below 1.1700 will confirm a bearish trend sending the pair back down the path of least resistance it experienced earlier this month. This could be dangerous for the pair but a feast for the bears as we see many support targets that can be tested here.