EUR/USD Powers Higher on Dismal US Retail Sales Miss: Bullish Breakout Brewing Toward 1.2000?

EUR/USD gained slightly after weak US retail sales data. It hits an intraday high of 1.19221 and is currently trading around 1.19235.  Intraday trend remains bullish as long as support 1.1830 holds. 

With a flat 0.0% month-over-month reading in the latest release, US Retail Sales greatly misses consensus estimates of +0.3% to +0.6% and shows a strong deceleration from November's upwardly revised +0.6% print; year-over-year growth also markedly slows down. While sector data presented a mainly poor picture—autos dropped -1.2%, gasoline stations slid -2.1%, and building materials softened, offset just by small increases in food/beverages (+0.8%) and online sales (+1.1%)—the core control group (minus automobiles, gas, construction materials, and food services) decreased -0.1% against predicted +0.3%. Downward adjustments to prior months (January now at -1.2%) heightened worries that discretionary spending is being hit harder than predicted by weather effects and continuous inflation. Driving Treasury yields lower (10-year under 4.5%), boosting higher Fed rate-cut chances, and leaving stocks blended near recent highs as markets turn toward caution despite pockets of consumer resiliency, the unfavorable surprise rekindled concerns about the soft-landing path of the economy.

The pair is holding above the 55 EMA, 200 EMA, and 365 EMA in the 4-hour chart. Near-term resistance is seen at 1.1935; a break above this may push the pair to targets of  1.2000/1.2085/1.2135/1.21995. On the downside, support is seen at 1.18890; any violation below will drag the pair to 1.18290/1.1765/1.1700/1.1660.

Market Indicators and Trading Strategy

Commodity Channel Index (CCI)-  Bullish

Average Directional Movement Index (ADX) - Bullish

 It is good to buy on dips around 1.1890 with a stop-loss at 1.1835 for a target price of 1.200/1.2085./1.2148.