FX Headlines: Euro Halts Slide as German Industry Continues to Power Euro-zone Growth
• China Growth Plans to Slow Commodities – Financial Times
• S&P Warns on Asian Inflation - WSJ
• Gaddafi Threatens Armed Resistance Against No-Fly Zone – The Guardian
EURUSD: The Euro halted its two day slide in the overnight as data out of Germany showed that industrial production soared. Output increased by 12.5 percent in January on a year-over-year basis. The figure beat analysts’ expectations, which forecasted growth of 11.1 percent. Accordingly, output expanded by 1.8 percent from December, when it contracted by 0.6 percent, as per the most recent revision. German growth is expected to continue to push forward, so long as inflation remains within the European Central Bank’s medium-term range of close to 2.0 percent. Additional significant data is expected out of Germany later in the week.
Taking a look at price action, key resistance looks to be in place at 1.3901, while recent fundamental developments paint a bearish picture for the EURUSD. As of late, the pair failed to hold above its 61.8 Fibo on the November 2009 to June 2010 move. The next level of support is the 20-SMA, at 1.3737. It is also worth noting that the pair must hold below 1.3930 on the daily charts for the bearish bias towards 1.3737 to be met.
Written by Christopher Vecchio, DailyFX Research.
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