Euro Strengthens to Three-Week High vs Dollar Ahead of Eurozone CPI Data

Euro has strengthened against the dollar on 30 June in early trade despite mixed data signals from the eurozone, helped by the dollar's weakness after the negative data surprises from the US in the previous week.

EUR/USD rose to as high as 1.3660 after the data releases from near 1.3640 prior to that. The pair touched its highest since 9 June at the high.

EUR/JPY strengthened to 138.51 from 138.10 following the data while EUR/GBP strengthened to 0.8026 from 0.8012.

German retail sales growth slowed to 1.9% year over year in May, data showed at 6:00 GMT. Month-on-month, sales fell 0.6% when the market was expecting a growth of 0.7%.

However, eurozone M3 money supply growth quickened to 1.0% on year in May, data after two hours showed. It compares to analysts' expectations of 0.8% rise and the previous month's growth of 0.7%.

The market is now waiting for the eurozone consumer price inflation numbers for June due at 9:30 GMT. The preliminary estimate by Eurostat may show 0.6% growth in the CPI inflation as per analysts' forecasts compared to the May final of 0.5%.

At 8:37 GMT, EUR/GBP traded at 0.8018, EUR/JPY at 138.40 and EUR/USD at 1.3651.

EUR/USD Technical Outlook

EUR/USD has first support at 1.3640 on the hourly chart, and then it comes at 1.3625, the 23.6% Fibonacci level of the 12 June to 30 June uptrend. The next levels are the 38.2% mark of 1.3600 and the 50% level of 1.3585 ahead of the 61.8% mark of 1.3570. The levels below are 1.3540 and 1.3510.

On the higher side 1.3670 is the first level to watch and then 1.3688 ahead of 1.3745, the 50% Fibonacci retracement of the 8 May to 11 June downtrend. A break of that will weaken the downtrend and expose levels such as 1.3800 and 1.3906 ahead of 8 May peak of 1.3994.