Today we got a slew of data from the Eurozone. 1) German retail sales grew 1.3% in July compared to the previous month. This beat forecasts of around a 1.1% reading, and was a sharp rebound after -0.6% reading in June, -0.9% in May, and -0.7% in April. 2) Consumer spending in France rose in July by 0.9% on the month. This beat forecasts of around 0.3%. June's reading was revised down to 0.7% after a 1.0% print.3) German unemployment DECREASED by 12K in July. The forecast had called for a 5K decline in unemployment. June's reading was revised to an INCREASE of 7K unemployed instead of 9K.4) The most important data point was the Euro-Area inflation data. July's inflation rate fell to an annual rate of 0.4%, down from the 0.5% reading in the past two months. Forecasts called for another 0.5% print. The 0.4% pace is the lowest since 2009. Core inflation, excluding food and energy, remained at 0.8%, in-line with forecasts. (source: forexfactory.com)Draghi had predicted the 0.5% print to be a bottom of inflation this year. But now we know its not. The deflationary risk is going to pressure the ECB to employ further stimulus, though today's reading might not be a trigger itself. The prospect of further stimulus should weigh on the Euro.EUR/GBP was rallying on the back of better data until the CPI data release. You can see the pair rejected from last week's high after the inflation data. Now if price can fall back below 0.79, it is likely in bearish continuation. Otherwise, a hold above 0.7915 should hold pressure towards the 0.7940 high. A break above 0.7940 opens up the 0.7980 resistance pivot. (eurgbp 1h chart)