EURUSD is looking for a strong break ahead of US Retail Sales

EURUSD needs a clear break above 1.0860 as the market’s sentiment is improving.

The EURUSD pair tried to rise higher from 1.0850 but had trouble rising beyond 1.0863 during the Asian session. The main currency pair is attempting to prolong the upswing as the US Dollar Index (DXY) has begun to show symptoms of tiredness.

Strength in risk-perceived assets has been stimulated by improving market sentiment. As investors ignore the concerns linked with problems with the US debt ceiling and take advantage of growing views that the Federal Reserve (Fed) would stop its policy-tightening phase, the S&P500 futures have mostly recovered the losses seen in early Asia.

Republican leaders and US President Joe Biden are scheduled to meet on Tuesday to continue discussions over lifting the borrowing ceiling.

After regaining its five-week high at 102.75 during the Asian session, the US Dollar Index (DXY) has displayed some volatility as US President Joe Biden prepares to meet Republican leaders for additional discussions on Tuesday over increasing the US Treasury’s borrowing limit. No tangible result from the meeting on Tuesday, however, would dramatically heighten concerns of payment default.

US rates have also been influenced by the USD Index’s increased volatility. The yield on the US 10-year Treasury has fallen below 3.46%.

Future movements of the USD Index would coincide with the publication of US Retail Sales data. Data on monthly retail sales show an increase of 0.7% rather than a decrease of 0.6%. A rebound in consumer retail demand might make it less likely that the Fed would hold off on raising interest rates.

On a quarterly and yearly basis, the rate of GDP growth in the Eurozone is anticipated to be stable at 0.1% and 1.3%, respectively.

Investors are anticipating the Tuesday publication of the preliminary Gross Domestic Product (GDP) numbers. For the first quarter of the Eurozone. The speed on a quarterly and yearly basis, GDP growth is anticipated to be constant at 0.1% and 1.3%, respectively. It appears that the Eurozone will avoid the impending recession.

Peter Kazimir, an ECB policymaker, stated on interest rate guidance that “ECB may need to raise interest rates longer than previously thought to help tame inflationary pressures.”

Technical Levels