The euro is currently strengthening against most other currencies, and today's German retail sales data bolstered this trend. To read more about the prevailing market sentiment, have a look at our latest comprehensive analysis of the EURUSD pair.
Earlier today, Destatis revealed that German consumption had increased moderately in November, beating the preliminary forecasts and driving the euro higher. This is one of the first major economic releases in the Eurozone following ECB's December policy decision.
As of late, the euro's most remarkable gains were registered against the struggling Japanese yen, as can be seen on the 4H chart above. And the moderate pick up in German consumption from earlier today helped the price action advance towards the 61.8 per cent Fibonacci retracement level at 131.212.
The latter represents the closest resistance level of significant importance where a bearish reversal is most likely to emerge from. Such a course of action would entail a retracement of the price action back below the middle line of the ascending channel.
The next bearish correction is likely to head towards the major resistance-turned-support area (currently in green), underpinned by the 38.2 per cent Fibonacci at 129.789. Unless it gets completed there, a conceivably deeper correction could then fall towards the 23.6 per cent Fibonacci at 128.909.
German retail sales grew by 0.6 per cent in November, beating the preliminary forecasts anticipating a moderate contraction by 0.2 per cent. Hence, consumption was able to improve upon the 0.5 per cent expansion that was observed a month beforehand.