EURUSD: Good data helps euro keep bullish momentum

The European currency returned to yesterday's highs after good data indicating that industrial production in the euro zone rose more than expected in January of this year.

This is a good signal that the eurozone economy, although with difficulty, overcomes the recession.

EUR

According to a report by the EU statistics agency Eurostat, industrial production in January increased by 1.4% compared with December 2018. Economists predicted that growth will be 1%. However, compared with January 2018, industrial production decreased by 1.1%.

As noted in the report, the main contribution to the result was made by Spain, where industrial production grew by 3.6%.

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The data on the US economy, expectedly, did not bring the necessary result and failed to affect the current upward correction in the EURUSD pair.

Although producer prices in the US rose in February, the data point to still moderate basic inflationary pressure.

According to a report by the US Department of Labor, the US PPI final demand index in February 2019 increased by only 0.1% compared with the previous month. The base index, which does not take into account volatile categories such as food and energy, also increased by 0.1% compared with January. Economists had forecast that the overall and basic PPI indices would show a 0.2% increase. Compared with the same period of the previous year, the index rose in February by 1.9%. The base index increased by 2.5%.

A good sign of a healthy economy is the demand for durable goods. In the US, growth is observed for the third month in a row. According to the US Department of Commerce, orders for durable goods in January rose by 0.4% compared with the previous month. Economists had expected orders to decline, by contrast, by 0.6%.

Despite the growth, it is worth noting that the main weight in orders was played by civil aircraft, where the increase was almost 16.0%. Excluding transport equipment, orders decreased by 0.1%.

As for the technical picture of the EURUSD pair, it remained unchanged compared with the morning forecast.

Buyers are focused on growth above resistance 1.1305. However, all attempts in the morning were unsuccessful. The return to support level of 1.1270 will increase the pressure on risky assets, which will lead to a sale to the area of 1.1235 and 1.1210 lows. The same signal to sell will be the unsuccessful fixing of EURUSD above the resistance of 1.1305, which will increase the pressure on the euro. In case of further growth along the trend, the target for buyers will be the level of 1.1340.

GBP

Speech by the Minister of Finance of the United Kingdom helped the pound to continue to grow. Philip Hammond said that a cloud of uncertainty hung over the economy, but the situation with the finances of the public sector continues to improve. In his opinion, a UK exit from the EU without a deal would mean a smaller and less prosperous economy.

According to the forecasts of the Minister of Finance, the GDP for 2019 will be at the level of 1.2% against the previous estimate of 1.6%. Hammond also noted the likely increase in inflation, as the economy is close to full load.

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