EUR/USD Price Nudges Higher as German Q3 GDP Beats Forecasts, US Dollar Slips
German GDP, IFO and EUR/USD Price, News and Analysis:
- German Q3 GDP beats forecasts
- German IFO better but still below October’s levels.
- EUR/USD sentiment remains mixed
German GDP rose by 8.5% in the third quarter of 2020 compared with the second quarter after adjustment for price, seasonal and calendar variations, German statistics office Destatis said today. The final figure was higher than the first release of 8.2%. Household consumption grew by 10.8% in the previous quarter, while exports of services and goods were up 18.1% compared with Q2. Imports rose by 9.1%.
The latest German IFO figures also beat forecasts but remained below levels seen last month due to the latest round of Covid-19 restrictions.
EUR/USD nudged slightly higher after the German GDP release earlier in the session and benefitted from a small sell-off in the US dollar. The greenback rallied sharply on Monday afternoon after the flash November Markit PMI jumped to 56.7, beating expectations of 53.0 and the prior month’s reading of 53.4. After having traded above 1.1900 in the morning, the pair fell sharply post-PMI release, making a low of just under 1.1800. The pair currently trades around 1.1875, boosted by today’s German GDP release and a marginally weaker US dollar, but may find difficulty in breaking above an area of resistance back up to 1.19175. Above here, there is little in the way of resistance before the September 1 high of 1.2011, a level last seen in April 2018.
EUR/USD Daily Price Chart (April – November 24, 2020)
IG Retail trader datashow30.78% of traders are net-long with the ratio of traders short to long at 2.25 to 1. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EUR/USD trading bias.
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