EURUSD moderately advances to 1.0370s after retreating from the 200-DMA

• Mixed US economic data kept the EURUSD from staying above 1.0400.
• US Retail Sales report crushing expectations requires further rate hikes by the Federal Reserve.
• According to Reuters, European Central Bank policymakers to lift rates by 50 bps at December’s meeting.
• EURUSD failure to register a daily close above 1.0400 would exacerbate a fall toward 1.0200.

The EURUSD extends its gains for the second consecutive day but struggles to hurdle the 200-day Exponential Moving Average (EMA) and retraces. The release of an upbeat Retail Sales report for the United States capped the Euro (EUR) gains, as the major slid below 1.0400. At the time of writing, the EURUSD is trading at 1.0371, above its opening price by 0.22%.

US Dollar bolstered by an upbeat US Retail Sales report

Sentiment remains negative, as shown by US equities trading with losses. A report from the US Department of Commerce (DoC) showed consumers’ resilience amidst one of the most aggressive tightening cycles by the Federal Reserve (Fed). October’s Retail Sales jumped by 1.3% MoM, vs. 1% estimations, the largest increase in eight months. Regarding the control group used for Gross Domestic Product (GDP) calculations, sales grew by 0.7% MoM against a 0.3% forecast.

Later, US Industrial Production plunged from September’s 0.1% to -0.1% MoM, missing estimates of a 0.2% increase.

After the reports, Federal Reserve officials expressed that inflation and higher rates are needed. They added that moderation to interest-rate increases could happen soon, though they emphasized that they need work to do. It should be noted that Kansas City Fed President Esther George said in an interview with the Wall Street Journal (WSJ) said it would be hard to lower inflation without triggering a recession.

In the meantime, Atlanta’s Fed GDPNow projection for Q4 is at 4.38%, above its previous reading of 4%, an optimistic forecast for the US economy,

European Central Bank members committed to taming inflation

Across the pond, European Central Bank (ECB) policymakers are crossing news wires, led by Vice-President Luis de Guindos saying that inflation is their top priority, while Ignacio Vizco added that the case for less aggressive rate hikes is growing. Meanwhile, the Eurozone Financial Stability Report published by the ECB said risks for financial stability grew sparked by worsening economic and financial conditions, blamed on the energy crisis and Russia’s invasion of Ukraine.

Elsewhere reports that ECB officials are favoring a 50 bps rate hike in December, contrarily to 75 bps, emerged, according to Reuters.

EURUSD Price Analysis: Technical outlook

The EURUSD sits comfortably above the November 14 daily high of 1.0358 after probing the 1.0400 figure. Of note, the Euro rallied toward the 200-day Exponential Moving Average (EMA) for the second time, but sellers outweighed buyers, sending the pair below the 1.0400 mark. So EURUSD traders should be aware that EURUSD’s failure to print a daily close above 1.0400 would exacerbate a fall towards the September 12 high at 1.0197, followed by the October 26 swing high-turned-support at 1.0088.