• Euro area data points to further weakness in early 2024
• Germany remains a concern amid weak factory numbers
• EURUSD higher but struggling around 1.10

It was a volatile end to the week for the dollar, with the jobs report initially causing a stir followed by the unexpectedly weak ISM services PMI.

Today it’s been Europe that’s delivered a selection of data, albeit none quite as important as the two from the US on Friday. Retail sales for November were in line with expectations at -0.3% while the October number was revised higher to 0.4%. Neither are particularly inspiring and continue to point to a region likely in recession.

Factor orders from Germany were no more inspiring and suggested the start of 2024 could remain difficult for the manufacturing sector. The Sentix investor confidence survey was also uninspiring despite the slight improvement to -15.8. It is improving gradually but it suggests investors are still not optimistic about the year ahead.

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A correction or not?

EURUSD is higher again at the start of the week after failing to break 1.10 on Friday before ending the session flat.

EURUSD Daily

Source – OANDA

This came after it rebounded off the 61.8% Fibonacci retracement level earlier in the session, a move that could potentially be a bullish signal after a week-long correction. A move back above 1.10 could further support that view, while a move below Friday’s low may suggest any correction has longer to run, or it isn’t actually a correction at all.

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