Some believe that the strength of the Euro today has been driven in part by U.K. retail sales, which have fallen at the end of March. Why? Well, over the last few months, the U.K. retail sector has been hit with the triple whammy of higher VAT, low growth and slower consumer spending.
As a result, retail sales growth has picked up speed, and for this reason the European stock market is reporting more appreciation and growth now. It is currently trading at a level not seen since the summer of 2020. One of the main reasons for this slow growth is retail sales because there has been little or no upward momentum.
As this momentum is coming to an end, it is not a surprise that the retail sales are starting to decelerate as well. With this said, how can traders see this reversal as a potential positive in the Euro price?
In terms of the Euro, the downtrend is likely to continue and it is this that traders should focus on. As a trader, you have two options to watch: the strength of the Euro, and the strength of the Pound.
If the Euro continues to weaken, then you will find the probability that it will fall further and it will be bullish. However, if the Pound remains strong, then it will provide bullish support as it sits near the twenty-year line.
While the Pound has remained strong, the Euro is on the move down in terms of strength. As a result, the Euro may rise as retail sales continue to rise, and the decline of the Pound becomes the largest contributor to its strength.
Many traders are betting that the retail sales will continue to grow at a steady pace, and it may even hit new highs. Those with a long term perspective may look at this as an opportunity, particularly when you consider that retail sales are likely to go up as consumer spending continues to rise.
Thus, when the Euro rises above the twenty-year line, you have the potential to become a millionaire. You may also have the chance to become a billionaire by picking up several multi-million pound homes from the bargain hunters.
If the Euro drops, you will see that retail sales start to drop in real terms. These drops will affect the value of the Pound, and as it does so, the Euro may rise against the Pound.
This is possible because if retail sales continue to fall, and the Pound remains weak, then you may begin to see the highest amount of Euros being sold at the lowest prices. There may also be a surge in the number of multi-million pound properties sold at very low prices.
In summary, the strength of the Euro is one factor you need to consider. The potential for retail sales to rise to near the highest levels in history, combined with a strong Pound is a great combination.