German Retail Sales Tumble in April; Euro Unmoved
German retail sales in April came in much weaker than expected at 0.6% month-on-month missing consensus forecasts of 1.8%, additionally the March reading was dramatically revised down to -2.7% from -2.1% month-on-month. The year-on-year readings gave a little more reason for hope coming in at 3.6% sounding beating expectations of 1.5% but were also accompanied by a downward revision of March’s numbers to -3.6% (from -3.5% previously). The reading underscores the ongoing weakness in domestic demand in Germany as consumers remain wary of turmoil on the EMU periphery and keep their wallets firmly shut.
There was little reaction in the euro to this release despite its inherent weakness and the concerns its raises for the German economy as focus lay elsewhere. The euro has wasted little time this morning in climbing higher as liquidity floods back after the US and UK holiday’s yesterday kept trade on a low ebb. The 1.4500 level looks like the near-term target and should contain gains, in the short-term, a failure by 1.4500 could see a loose 1.40-1.45 range established but a break out of either of these tow levels will accelerate gains/declines.
Written by Jonathan Granby, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.