EUR/USD attracts some buyers to the mid-1.0900s, investors await Eurozone Retail Sales data

• EUR/USD holds positive ground near 1.0948 despite the rebound of USD.
• US Nonfarm Payrolls (NFP) increased by 216,000 jobs in December from 173,000 in November.
• German Retail Sales for November came in worse than expected, falling to 2.4% YoY vs. a -0.1% drop prior.
• German Trade Balance and Eurozone Retail Sales for November are due later on Monday.

The EUR/USD pair attracts some buyers during the early Asian session on Monday. The major pair bounces off the multi-week lows of 1.0876 and hovers around 1.0948, up 0.09% on the day.

The Federal Reserve’s (Fed) pivot is supported by a moderating of inflation but not necessarily by aggressive rate cuts. Investors will take more cues from the US inflation data on Thursday for additional evidence of price pressures. The market estimated the headline Consumer Price Index (CPI) to show an increase of 3.2% YoY, while the Core CPI is forecast to ease to 3.8% YoY.

The US labor data on Friday cast doubt on the expectations of the financial markets that the Fed would begin interest rate cuts in March. The Labor Department revealed on Friday that US Nonfarm Payrolls (NFP) increased by 216,000 jobs in December from 173,000 in November, above the market consensus of 170,000.

Investors will focus on the November Eurozone Retail Sales on Monday, which is projected to show -0.3% MoM versus 0.1% in October, while the annual rate is expected at -1.5% from -1.2% in October. Nonetheless, the downbeat German Retail Sales last week point to downside risks here.

On Friday, the German Retail Sales for November came in worse than expected, falling to 2.4% YoY from a 0.1% drop in the previous reading. The monthly figure arrived at -2.5% MoM versus 1.1% prior. Additionally, the Eurozone Harmonized Index of Consumer Prices for December grew 2.9% YoY from the previous reading of 2.4%, while the Core figure rose 3.4% YoY versus 3.6% prior. Both figures were weaker than the estimation.

Market participants will keep an eye on the German Trade Balance and Eurozone Retail Sales for November, due on Monday. Later this week, the US Consumer Price Index (CPI) will be released on Thursday, and the US Producer Price Index (PPI) for December will be due on Friday. These data could give a clear direction to the EUR/USD pair.