Euro Declines Against Dollar

Posted by Rob

April 3, 2008

The Euro fell against the USD and the Yen after Eurozone Retail sales data was released. The results fell below expectations signalling a slowdown in the European economy.

“Europe is not as close to a recession as the U.S., but there are signs the European economy is slowing and will continue to slow,” said Jay Bryson, global economist at Wachovia Corp. in Charlotte, NC - Bloomberg

The EU data revealed a decline of 0.5 percent in retail sales since February. This points to a slowdown in Europe as well as increase pressure on the ECB to cut interest rates.

Technical Chart: EURUSD

The 1-hour chart for the EURUSD shows the recent Euro sell-offs i nrecent days favouring the USD.

We can also see that yesterday the EURUSD pulled back to the 50% Fibonacci line around 23:00-00:00 GMT. Earlier today the price pulled back down towards an area of support and bounced up towards the 55-day sma.

Looking for sell signals due to the down trend we would look for the stochastic to reverse. This may occur around the resistance line shown on the chart. However, if this resistance line is broken expect a Euro gain in the region of $1.5665, or possibly $1.5700.

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