EURUSD Price Falls Further as German Narrowly Avoids Recession
German GDP and EURUSD Price, Analysis and Chart:
- German economic growth flat in Q4.
- EURUSD nearing lows last seen in June 2017.
Further evidence that the Euro-Zone is facing a tough few months ahead with data released earlier today showing the German economy stalling in the last quarter of 2018 and narrowly avoiding recessionary territory. German statistics bureau Destatis reported German Q4 GDP at 0.0%, after a -0.2% reading in Q3, while the economy expanded by 0.9% on the same quarter a year ago, missing expectations of 1.1% growth.
Germany’s economy, especially the export space, has been hit by a toxic cocktail of slowing global growth, the diesel scandal that rocked the automobile sector, Brexit worries and increasing fears that US trade sanctions may hit the automobile sector with a US Department of Commerce report scheduled to be released on February 17.
Later this morning we will get the first look at Q4 Euro-Zone GDP with expectations now for just 0.1% q/q growth, down from 0.2%, and 1.1% annualized growth, down from 1.2%.
EURUSD continues to drift lower and is looking for a clean break and close below the 1.1280 - 1.1300, an area that has provided strong support over the last few months. If we close and consolidate below here, 1.1300 may well become a new resistance level, leaving the pair vulnerable to a re-test of the November 12 low at 1.1215 ahead of a further fall to the 1.1106 – 1.1117 lows printed all the way back in June 2017.
IG Client Sentiment data currently shows retail are 70.6% net-long EURUSD, a bearish contrarian indicator. However, the combination of current sentiment and recent changes gives us a stronger bearishEURUSD trading bias.
EURUSD Daily Price Chart (May 2018 – February 14, 2019)
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