You are here: Home > articles > Forex > Beware of a False Breakout as EUR/USD Rises After Weak German Data
Beware of a False Breakout as EUR/USD Rises After Weak German Data
August 7, 2018 2:41 pmVideo
Latest News
- Supercharged US dollar turns to GDP growth data – Preview April 19, 2024
- Technical Analysis – USDCHF remains in bullish structure April 19, 2024
- Hot forecast for EUR/USD on April 19, 2024 April 19, 2024
- We’ve Donated Books in Vietnam for Children’s Day April 19, 2024
- Week Ahead – US GDP and BoJ decision on top of next week’s agenda April 19, 2024
- Technical Analysis – GBPJPY range trading continues April 19, 2024
- Overview of the GBP/USD pair on April 19th. The Bank of England may lower the rate in May April 19, 2024
- Overview of the EUR/USD pair on April 19th. Jerome Powell crushed all euro growth prospects April 19, 2024
- Key events on April 19: fundamental analysis for beginners April 19, 2024
- Trading plan for GBP/USD on April 19. Simple tips for beginners April 19, 2024
- Trading plan for EUR/USD on April 19. Simple tips for beginners April 19, 2024
- Forecast for EUR/USD on April 19, 2024 April 19, 2024
- Forecast for GBP/USD on April 19, 2024 April 19, 2024
- Forecast for USD/JPY on April 19, 2024 April 19, 2024
- Technical Analysis of Intraday Price Movement of Litecoin Cryptocurrency, Friday April 19 2024. April 19, 2024
- Technical Analysis of Intraday Price Movement of Polkadot Cryptocurrency, Friday April 19 2024. April 19, 2024
- Michelle Bowman reiterated Jerome Powell’s opinion April 19, 2024
- The ECB has finally made up its mind April 19, 2024
- The dollar is in control April 19, 2024
- Analysis of the GBP/USD pair on April 18, 2024 April 18, 2024
Germany is the largest economy in Europe, with a GDP of more than $3.4 trillion. The country’s GDP is 21% of the entire GDP of the European Union. It is closely followed by the United Kingdom and France whose GDP are equal to 15% and 11% of the EU respectively. Therefore, it is easy to see why the performance of the German economy is so important to the movements of the euro.
Yesterday, data from the Federal Statistics Office showed that the industrial goods orders declined by 4.0%. This was a sharp decline from a month before and was the lowest level since July 2017. The biggest slump on Made in Germany goods came from outside the Eurozone, which is a reflection of the ongoing trade tussles between the US and Germany.
Today, the sad news continued with the release of industrial production data. In June, the industrial production slumped by negative 0.9%. This was a sharp decline from a gain of 2.4% in May and the negative 0.5% which traders were expecting. In addition to this, the country’s exports remained flat in June while exports rose by 1.2%. On an annualized basis, imports and exports rose by 10.2% and 7.8% respectively.
A potentially good sign for the Euro is that the US and the EU are now in negotiations on how to deal with the issue of trade. Last week, Donald Trump and Jean Claude Juncker issued a détente that pauses all the tariffs.
For Germany, tariffs on industrial goods to the United States would have been disastrous. In 2016, automobiles, machinery, and chemical goods accounted for 19%, 14%, and 9% of all exports. Therefore, tariffs would have had major implications for the economy.
This factor is probably the reason why traders are buying the Euro this morning. After huge declines yesterday, the EUR/USD pair has reached 1.1582. This price is in line with the 21-day moving average and is above a key resistance level as shown below. There is a likelihood that today’s movement is a false breakout, which means that the lower movements on the EUR/USD pair is likely to continue.
The post Beware of a False Breakout as EUR/USD Rises After Weak German Data appeared first on Forex.Info.
Related Posts: