Eurozone Retail Sales increased by 0.2% month-on-month in May, falling short of the 0.3% consensus estimate, though this marks a rebound from April's 0.4% decline. On an annualized basis, retail sales rose by 1.6%, in line with expectations and up from the previous 1% reading [1]. Despite the miss, there was no immediate impact on the Euro, with EUR/USD trading 0.15% lower at around 1.1420 following the data release [1].
German Factory Orders provided a positive surprise, rising 1.9% month-on-month in May, well above the 1.2% expected and partially reversing April's 3.2% contraction [2]. Additionally, the Eurozone Sentix Investor Confidence index for July improved to -3.1, its best level since the start of the Iran conflict and a notable recovery from June's -13.4 [2]. However, investor enthusiasm was tempered by renewed concerns over the US-Iran peace process, which supported the US Dollar and contributed to the Euro's moderately negative stance against the Greenback. At the time of reporting, EUR/USD was trading near 1.1415, with the US Dollar Index (DXY) appreciating beyond 101.00 [2].
Technical analysis from United Overseas Bank (UOB) indicates that EUR/USD remains in a short-term range, with flat momentum indicators suggesting intraday consolidation between 1.1415 and 1.1455. UOB maintains a mildly positive bias for the Euro over the next 1–3 weeks, provided it holds above the 1.1370 support level, but highlights firm resistance at 1.1470 and 1.1500 [3].
In the broader context, BNY's Geoff Yu notes that softer US labor data and easing inflation have reduced pressure for further Federal Reserve tightening, but upcoming US Services PMI and ISM Services data will be crucial for shaping rate expectations. Weaker US data could extend yield relief, while stronger prints would argue for caution [4].
No relevant information was provided in Source 5 regarding the Eurozone or EUR/USD.
CONCLUSION
Eurozone retail sales data missed expectations, but annual growth remains steady. Positive German factory data and improved investor confidence were offset by geopolitical concerns and a firmer US Dollar, keeping EUR/USD in a tight range. Market participants are now focused on upcoming US services data for further direction.