EUR/USD: German industrial production surged to a 3-month high level in May


EURUSD Movement

For the 24 hours to 23:00 GMT, the EUR declined 0.18% against the USD and closed at 1.1401 on Friday.

On the economic front, Germany’s seasonally adjusted industrial production rose 1.2% on a monthly basis in May, advancing by the most since February 2017 and surpassing market expectations for a gain of 0.2%. In the previous month, industrial production had registered a revised rise of 0.7%.

The greenback gained ground against most of its major counterparts, following robust non-farm payrolls data in the US.

Non-farm payrolls indicated that the US economy added 222.0K jobs in June, adding the most number of jobs since February, signalling that strength in the nation’s labour market is strong enough to warrant one more interest rate hike this year by the Federal Reserve. Non-farm payrolls had recorded a revised increase of 152.0K in the previous month, while markets had expected for an advance of 178.0K. However, the nation’s average hourly earnings of all employees climbed less-than-expected by 0.2% MoM in June, highlighting that wage growth remains anaemic despite strong hiring in the world’s largest economy. Investors had anticipated average hourly earnings of all employees to gain 0.3%, following a revised rise of 0.1% in the previous month. Also, the nation’s unemployment rate nudged up to 4.4% in June, while markets participants had envisaged the unemployment rate to remain steady at 4.3%.

In the Asian session, at GMT0300, the pair is trading at 1.1405, with the EUR trading marginally higher against the USD from Friday’s close.

The pair is expected to find support at 1.1377, and a fall through could take it to the next support level of 1.1348. The pair is expected to find its first resistance at 1.1437, and a rise through could take it to the next resistance level of 1.1468.

Moving ahead, investors will look forward to the Euro-zone’s Sentix investor confidence index for July and Germany’s trade balance figures for May, slated to release in a few hours. Moreover, the US labour market conditions index for June, set to release later in the day, will be eyed by traders.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

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