Although the European currency was supposed to decline amid disappointing results of the EU summit, it resumed an upward trend instead, which surprised, but also pleased investors.

Last Friday, Brexit negotiations ended without much progress, and immediately after the meeting, the leaders of both concerned parties began to speak openly about the need to prepare for an unregulated Brexit. At the same time, the EU blamed the UK for this lack of progress in the negotiations, but the UK threw it back and said that it was the EU who categorically refuses to change its approach. Nevertheless, in the end, both parties said that there is a need to further intensify their dialogue, in order to finally come to a mutually beneficial agreement, especially since the time is running out, as the UK will finally leave the EU on January 1 ...

In any case, the results of the summit turned out to be exactly as expected, and they were no different from the results of several previous similar summits, during which the same issue was discussed. Because of this, panic did not arise in the market, and this circus will continue for at least another month. As of the moment, negotiations have been extended until October 15, and hopes for a compromise by all means inspired the European currency to remain afloat for some time.

With regards to economic statistics, the latest report on eurozone inflation did not affect the European currency at all, even though the latest data revealed that consumer prices accelerated from -0.2% to -0.3%. This is because the figure was only a preliminary estimate, which has long been incorporated into the value of the euro in the market.

Inflation (Europe):

Statistics in the United States, meanwhile, turned out to be much better than forecasts, and one good example is the increasing US retail sales, which, according to reports, grew from 2.8% to 5.4%. The Economists originally assumed that it would slow down from 2.6% to 2.2%, but aside from rising instead of a decline, it also revised previous results for the better. If we add to this the continuing growth of inflation, the situation will be perfect as after all, both of the factors indicate a significant increase in companies' profits.

As for industrial production, the data came out worse than the forecast, as according to the report, instead of the decline slowing from -7.7% to -6.6%, it accelerated from 7.0% to 7.3%. Nevertheless, it is not so important compared to the data on retail sales, and this is because consumer activity has much more weight.

Retail Sales (United States):

Today, the macroeconomic calendar is completely empty. The Brexit issue also fades into the background in the coming days, as London and Brussels are preparing for the next round of negotiations. If there is anything that could affect the market, it will be the next messages regarding the increase of coronavirus cases in Europe, as well as another tightening of restrictive measures.

With regards to the EUR / USD pair, the support level of 1.1700 is the new pivot point, as this is where a stop arose with a subsequent correction. It is also inside the sideways channel that the quote was trading earlier, so as a result, the volume of trading positions have reduced in the market.

Price fluctuations have also occured along the level of 1.1700, during which a pullback has recently been observed.

In terms of market dynamics, a slowdown was recorded when the euro reached the level of 1.1700, which signals that an accumulation may soon occur in the pair.

If we look at the daily chart, we will also see the recovery process relative to the depth of the correction: 1.1612 -> 1.1830.

It is presumed that the area of 1.1690 / 1.1700 will continue to exert pressure on short positions, and that a flat may form around 1.1690 / 1.1730. In order to avoid this scenario, the quote must consolidate below the level of 1.1685 in the four-hour time frame.

Using indicator analysis, it is clear that the technical instruments are more inclined to sell than to buy, but due to the deceleration, a so-called neutral signal occurs at the shorter time periods.