EUR/GBP slides below 0.8670 following weak Eurozone Retail Sales

• The Euro extends losses after downbeat Eurozone Retail Sales data
• Retail Consumption in the Euro area has dropped 0.5% in July, well beyond market expectations of a 0.2% decline.
• Technical indicators show bears taking control with their focus on trendline resistance at 0.8630.

The Euro extended its reversal from 0.8715 highs against the British Pound on Thursday. The pair broke the intraday low at 0.8670 following weak Eurozone retail sales figures, reaching fresh lows at 0.8660 so far.

Eurostat data released earlier on Thursday has shown that retail consumption fell 0.5% in July, exceeding expectations of a 0.2% drop, from an upwardly revised 0.6% increase in June. Year-on-year, retail sales increased 2.2%, below the 2.4% expected, and also below the 3.5% growth seen in the previous month

Technical Analysis: Price action remains moving within an expanding wedge

A look at the 4-hour chart reveals a mounting bearish momentum, with the pair trading within a broadening wedge pattern, a figure often seen near major tops.

The RSI has dropped below the 50 line, and the MACD has crossed below the signal line, suggesting that bears are taking control. Sellers have pushed the pair below Wednesday’s low, at 0.8670, aiming for the wedge bottom, now around 0.8630. Further down the 0.8600 (July 7, August 14 lows) is a key support area.

To the upside, immediate resistance is at the intraday highs of 0.8680, ahead of the September 2 and 3 highs, at the 0.8710-0.8715 area and the wedge top, now at 0.8730.