Weak data on the eurozone economy, which came out in the first half of the day, especially for industrial production in Germany, did not affect the quotes of the European currency, which continued to trade sideways in tandem with the US dollar in anticipation of an important report on the number of people employed in the US non-farm sector.
According to the Federal Bureau of Statistics of Germany, industrial production in Germany in October of this year dropped sharply compared with the previous month due to a decline in the manufacturing industry and construction. The energy sector was also negatively affected by the indicator, which also showed poor results.
According to the report, industrial production, which includes the above three indicators, in October decreased by 0.4% compared with the previous month. Economists had expected production to grow by 0.4%.
Industrial production in France, on the contrary, increased in October of this year after a serious fall in September, where the decline was 1.9%, instead of the previously declared 1.8%. According to the report, industrial production in France grew by 1.4% in October, while economists had expected production to grow by only 0.7%.
Despite the growth, it is hardly possible to say that the eurozone economy is in perfect order. Rather, on the contrary, the latest data more and more suggests that the growth rate of the eurozone economy in the 3rd quarter was slower than previously thought.
According to the statistics agency Eurostat, the eurozone's GDP in the 3rd quarter of this year showed an increase of only 0.2% compared to the 2nd quarter and increased by 1.6% over the same period of the previous year. On an annualized basis, GDP growth in the eurozone was 0.6%, not 0.7%, as previously reported.
The main reason for the slowdown in economic growth was the decline in exports, while an increase in reserves, on the contrary, stimulated growth. The measures were taken by the White House to impose trade duties led to a weakening of foreign trade, which put negative pressure on the growth of the eurozone economy in 2018.
Despite the fact that a number of economists expect some recovery in the eurozone in the 4th quarter of this year, the European Central Bank needs to seriously think about the need to curtail its asset repurchase program, which is expected to be fully completed this month.
As for the technical picture of the EUR / USD pair, today much will depend on the data on the change in the number of people employed in the US non-farm sector. The main goal of the buyers will be the renewal of large resistance around 1.1420, a breakthrough of which will lead to the formation of a strong upward impulse in the euro. In the case of a decrease in the trading instrument, support can be sought in the area of the minimum of the week from the area of 1.1315-1.1325. Otherwise, it will be prudent to open long positions in risky assets after testing large lows around 1.1270.
The material has been provided by InstaForex Company - www.instaforex.com