EURUSD: The latest weak German data may alarm investors and the European Central Bank

The European currency made an unsuccessful attempt to grow in the first half of the day, and after the release of data on industrial production in Germany, the EURUSD pair returned to the low of the day, where it was trading at the time of writing.

Weak data on the consumer confidence indicator, which remained at its previous level, also did not add optimism to traders who put on further strengthening of risky assets.

According to the report, industrial production in Germany fell in November last year, which is another sign of the impending recession, confirming the decline in the growth rate of Europe's leading economy.

Given the weakness of emerging markets, as well as trade conflicts, which everyone will surely remember in the first half of this year and which will still make a negative contribution to the development of the world economy, we cannot say with confidence that the European Central Bank will raise interest rates at the end of this summer .

According to the report, industrial production in Germany in November fell by 1.9% compared to the previous month, while economists had forecast industrial production growth by 0.3%.

As I noted above, the euro continued to fall in price after the release of weaker than expected data on sentiment in the eurozone economy.

According to the report, the business climate index in December 2018 amounted to 0.82 points against 1.04 points in November, while economists had forecast the index to be 0.99. The index of sentiment in the economy in December also fell to 107.3 points from 109.5 points in November. Economists had expected the index to decline to 108.5 points.

Weak indicators on the consumer confidence indicator also push traders to close long positions in risky assets. According to the report, the indicator of consumer confidence remained at -6.2 points in December this year, fully coinciding with the forecasts of economists. This suggests that eurozone households are showing little confidence in the current state of the economy and its future development.

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As for the technical picture of the EURUSD pair, it remained unchanged, and the scenario, after an unsuccessful break above the resistance in the area of 1.1470, began to develop in a bearish direction. Further downward correction will be restrained by large support levels around 1.1400 and 1.1350.

Today, data on the Australian economy came out, which also pointed to the deterioration of consumer sentiment. It happened directly due to the fall in housing prices and the volatility of the stock markets.

According to the report of ANZ and Roy Morgan, the consumer confidence index in early January 2019 decreased by 2.2% compared to the previous week, to 115.2 points.

The material has been provided by InstaForex Company - www.instaforex.com