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Euro and German GDP Growth:

  • German economy grew 1.5% in 2018, down from 2.2% in 2017.
  • EURUSD remains under downside pressure ahead of EU inflation release.

Q1 2019 Trading Forecasts including USD and EUR.

EURUSD Touches a One-Week Low as German Economy Slows

The German economy expanded by 1.5% in 2018, sharply lower than the 2.2% increase recorded in 2017, according to preliminary data released by the Federal Statistics Office earlier today. The data suggests that German Q4 growth was positive after contracting by 0.2% in the third quarter, although this is likely to be marginal, while today’s annual number may be revised going forward. This lack of growth in the second-half of 2018 is likely to roll-over into 2019 and will weigh on the single currency, crimping the ECB’s ability to tighten monetary policy later in the year. The recent run of weak Euro-Zone data continues to undermine the Euro, and this may continue Wednesday and Thursday when Germany and the EU release their latest inflation figures.

EURUSD Price Latest: Heading Lower on Weak German Growth Data

EURUSD Price Outlook: Unable to Make a Decisive Break Higher

EURUSD currently remains capped by the 200-day moving average, currently situated at 1.1537, and is trading at a one-week low. The pair have also just broken below the 20-day moving average around 1.1435 and may make a fresh attempt at the 50-day ma at 1.1392 in the short-term. Below here 1.1300 heaves into view, a level that has seemingly been defended on a handful of occasions from mid-August onwards. A break and close below this level may prompt fresh attempts at 1.1265 and the 18-month low made on November 12 at 1.1215.

EURUSD Daily Price Chart (June 2018 – January 15, 2019)

EURUSD Price Latest: Heading Lower on Weak German Growth Data

IG Client Sentiment Datashows investors are currently 53.8% net-long, a bearish contrarian indicator. However recent daily and weekly positional shifts give us a stronger bearish trading outlook.

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on EURUSD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.