EUR: Another weak data for Germany continues to alarm

The data released in the first half of the day in Germany provided only temporary support for the European currency, after which the EUR / USD pair trading returned to the side channel.

An unsuccessful update of yesterday's high may indicate completion after the New Year upward correction in the euro. Today's publication of the Federal Reserve System today may lead to the strengthening of the American dollar in the afternoon but it will be possible to speak of more serious growth prospects only after clarity in the dialogue between the US and China. Obviously, nothing new will be said in the minutes but their publication may be the reason for closing a number of long positions in the euro.

The next weak data on Germany continues to alarming. According to the Federal Bureau of Statistics, exports from Germany declined in November 2018, despite the higher surplus than forecasted by experts. Given the tensions in world trade, a reduction in exports may create additional problems for economic growth in the future.

According to the data, the trade surplus of Germany amounted to 19.0 billion euros in November while economists had expected it to be at the level of 18.0 billion euros. Exports in November fell by 0.4% compared to 110.6 billion euros in October, while imports fell by 1.6%.

The data on reducing unemployment in the eurozone did not largely help euro buyers in the first half of the day, even though they were much better than economists' forecasts.

According to the data, the unemployment rate in the eurozone for the month of November fell to a minimum in the last 10 years. As indicated in the report of the European Bureau of Statistics, the total number of unemployed in October 2018 decreased by 90,000 people, and the unemployment rate itself fell to 7.9% from 8.0%. By contrast, economists expected unemployment to rise to 8.1%.


In an interview today, Fed spokesman James Bullard once again confirmed the fears of many traders that are associated with a slowdown in the rate of borrowing costs in the United States this year. Bullard said that at present the rates are at the right level and there is no need to raise them further. However, if the Fed goes too far, it could push the economy into recession.

Bullard also noted that the Fed has enough tools and if the economy weakens unexpectedly, it will be possible to lower rates. Yet, despite this, a stable monetary policy will ensure inflation in the area of the target level. According to his forecast, the US GDP growth in 2019 will be at the level of 2.25% - 2.5%.

As for the technical picture of the EUR/USD pair, it remained unchanged and after an unsuccessful breakthrough above the resistance around 1.1470, it is possible to begin the development in a bearish direction. A further downward correction will be constrained by large support levels of 1.1400 and 1.1350.

The material has been provided by InstaForex Company -