The euro remains in a narrow side channel, and data released on industrial production in Germany, which indicate a good start in the 1st quarter of this year, were ignored by traders. Most likely, attention is focused on trade negotiations between the US and China, and the further direction of the EURUSD pair will depend on them. Increasing disputes may lead to a stronger US dollar, while a more positive outcome will support risky assets.
According to the Federal Bureau of Statistics of Germany, industrial production in March increased by 0.5% compared with February. Economists had forecast a 0.5% drop in production in March.
Such a strong divergence of expectations from the final data was due to strong activity in the manufacturing industry as well as the construction sector. Thus, production in the manufacturing industry increased by 0.4%, while production in the construction sector in Germany in March increased by 1.0%.
However, the Bureau noted that despite the good growth, the prospects for German industry remain moderate. Compared to the same period of the previous year, industrial production in Germany decreased by 0.9%.
The speech of the President of the European Central Bank was ignored and did not concern monetary policy.
As for the technical picture of the EURUSD pair, it continues to be the same as at the beginning of this week. Further prospects for the movement of the trading instrument seem vague. Bears can show themselves after the return and update of the resistance level of 1.1215, while bulls will be clearly set to hold large support of 1.1170, from which an attempt has already been made to build the lower boundary of the new upward channel. The target of buyers is the breakdown and consolidation above 1.1215, which will open a direct road in the area of last week's highs to 1.1260 and 1.1290.
In the first half of the day, a report was also published, which indicated that China's exports in April declined, which in general was highly expected against the backdrop of a trade war between the United States and Beijing.
According to official data, exports in April of this year fell immediately by 2.7% compared with the same period of the previous year, after rising by 14.2% in March. Economists had expected exports to grow by 1.8%. Meanwhile, imports, on the contrary, increased by 4.0% compared to the same period of the previous year after a decline of 7.6% in March. Economists had expected a decline in imports by 2.7%. China's foreign trade surplus in April was $13.8 billion, while economists assumed that the trade surplus would be $33.6 billion.
Oil prices remained in a narrow range after today's statement by the President of Iran. In it, Hassan Rouhani drew attention to the fact that the Islamic Republic may terminate the implementation of certain obligations related to the nuclear deal, which was concluded in 2015. Such statements, of course, will not be ignored by the White House USA. However, this was primarily addressed to all European authorities.
Rouhani reminded the countries of Europe about the concluded agreements, and also gave them 60 days to solve problems in the field of oil supplies and banks, which the EU uses to hide behind imports. The Iranian President also said that if his requests are not heard, Tehran may return to complete the construction of a nuclear facility in Arak, thereby terminating the nuclear deal.
The material has been provided by InstaForex Company - www.instaforex.com