Retail sales in the United States rose 2.3% year-on-year in May 2024, following a downwardly revised 2.7% increase in April. The result in May was significantly worse than the 2.8% forecast. But surprisingly the dollar did not sharply fall. In general, the market remained stable. The U.S. industrial production data provided support to the dollar, which, unlike retail sales, turned out to be significantly better than expected. The decline rate was expected to slow from -0.4% to -0.1%. However, the previous data were first revised downward to -0.7%, which should have exerted pressure on the dollar. But instead, the decline turned into a rise of 0.4%. Such good results boosted the dollar so it managed to hold its ground.
Today, the market is expected to remain stagnant due to the public holiday in the United States.
EUR/USD has been trading above the 1.0700 level for the second consecutive day, indicating support. As a result, the volume of short positions decreased, leading to a pullback and the price was also stagnant above this level.
On the four-hour chart, the RSI technical indicator is hovering in the lower area of 50/70, thus reflecting bearish sentiment among traders.
On the same chart, the Alligator's MAs are intertwined, suggesting a slowdown in the downward cycle.
Outlook
In order to raise the volume of short positions, the price must consolidate below the 1.0700 level during the day. If this happens, the price may move towards the year's local low. However, if the price fails to settle below the key level then the euro may gradually recover.
The complex indicator analysis shows unstable readings in the short-term and intraday periods as the price is stagnant.
