ECB inaction and strong Retail Sales could send EUR/USD back through 1.07 – SocGen

Kit Juckes, Chief Global FX Strategist at Société Générale, analyzes EUR/USD outlook ahead of the ECB meeting and US Retail Sales. 

Short Cable for the ECB?

A 25 bps ECB hike and a clear indication of a pause would risk leaving the Euro in a range, especially if US Retail Sales aren’t strong. 

ECB inaction and strong Retail Sales could send EUR/USD back through 1.07 and reverse some of the drop in US yields from Wednesday, giving the Dollar a more pronounced bounce. 

Short GBP/USD would appeal even more and if 1.2430 broke, a decent fall could follow. Even someone as untechnical as me can see the significance of the 200-DMA here.