Daily U.S. Session Watchlist: EUR/GBP

The U.K. just printed its retail sales data.

How can the release affect EUR/GBP’s short-term support breakout?

Before we talk setups, here are the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

• Philly Fed factory activity edges lower in June
• U.S. jobless claims show surprise increase to highest level in a month
• ADP: employment in Canada increased by 101,600 jobs in May 2021
• Japan inflation gains for the first time since March 2020
• BOJ to launch new scheme for fighting climate change, keeps policy steady
• BOJ tankan to show manufacturers’ Q2 mood improved
• Asian shares slip, deepen weekly loss after hawkish Fed
• Dollar eyes stellar week as Fed sends bears scurrying
• UK retail sales dip as consumers, freed from lockdown, dine out

Upcoming Potential Catalysts on the Economic Calendar:

• Eurozone’s current account at 8:00 am GMT
• U.K.’s consumer inflation expectations at 8:30 am GMT

What to Watch: EUR/GBP

In case you missed it, the U.K. saw a 1.4% dip in retail activity in May as easing restrictions drove consumers away from groceries and online stores and into restaurants and hospitality establishments.

Markets aren’t too worried, though, because a dip in retail sales may not be such a bad thing in this case.

Still, EUR/GBP popped higher after the news and reached the .8585 area of interest before some bears stepped in.

With not a lot of top-tier news scheduled in the next few hours, EUR/GBP may continue to price in the potentially sooner-than-expected economic reopening in the U.K. This could drag the euro back down to the .8530 weekly lows.

Or not. Now that EUR/GBP has broken above the Double Bottom “neckline,” I’ll also be on the lookout for a possible move back to the .8610 previous resistance level.

What do you think? Will the pound regain its intraday losses against the euro? Or will euro bulls take this upswing all the way back to EUR/GBP’s June highs?