Market News & Analysis


Top Story

EUR/USD At 4 Month Low On Weak German Data, NFP Next

The euro is under pressure in early trade on Friday following yet more disappointing data from Germany. German industrial production declined by more than expected -3.5% mom in December, greater than the -0.2% fall forecast. Annually production declined -8.7% well short of the -6% expected. French industrial output numbers also badly disappointed. 

The weak industrial production data comes hot on the heels of dismal German factory orders which showed an unexpected decline to -2.1% mom. 

The data confirms that the manufacturing slump continues in Europe’s largest economy. Whilst there was a temporary pick up in November, that proved to be short live and December figures are showing a continuation, if not an acceleration of the downward trend.

That said, it’s not all doom and gloom, soft indicators still point to a bottoming out and a stabilization in the manufacturing sector. However, that was before the coronavirus outbreak took hold. Supply chain disruptions and, Chinese economic growth is forecast to slow considerably which could push any form of recovery in the German manufacturing sector, however slow, firmly off track. 

NFP up next
The dollar has been in favour across the past week thanks upbeat US data. The ADP private payrolls, ISM manufacturing and non-manufacturing all surprised to the upside. Traders are now looking ahead to non-farm payrolls. Expectations are for 160,000 jobs to have been created. Unemployment rate is expected to stay steady at 3.5%, whilst wages are due to increase 0.3% compared to 0.1% in December.

Levels to watch
EUR/USD is down 0.25% hovering around 4-month lows of $1.0950. Whilst it has dipped below -30 on RSI indicating over sold conditions, it trades firmly below its 50,100 and 200 sma with downside momentum.
Support can be seen at $1.0940 (low 8th Oct) prior to $1.0879 (low 4th Oct).
On the flip side, resistance could be at $1.10 (round number), opening the door to $1.1077 (200 sma) prior to $1.1112 (high 21st Jan)



From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.