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Talking Points

  • Euro climbed higher against the US Dollar, and cleared a few major hurdles for a move towards $1.1700.
  • The EURUSD is now correcting lower and forming an interesting structure on the daily chart.
  • German Gross Domestic Product published by the Statistisches Bundesamt Deutschland posted a rise of +0.4% in the second quarter of 2015, compared with the preceding quarter.
  • German business sentiment index was reported by the CESifo Group increased from the last reading of 108 to 108.3 in August 2015 whereas the market was expecting a decrease.

Key Highlights:

German GDP

German IFO Business Climate Index

EURUSD Technical Analysis

The EURUSD enjoyed a monster bullish run recently, as the pair climb-ed to trade near $1.1700 where it found sellers. There was a major reaction noted around the stated level, as the pair moved lower by more than 250 pips after setting a short-term high.

However, there were a few bearish trend lines formed on the daily chart, which were cleared during the upside. Moreover, the pair is above the 100 and 200-day simple moving average, which is a positive sign.

EUJRUSD -  08.25.2015-1

If the EURUSD pair corrects lower from the current levels, then it might find support near the 200-day SMA.

Fundamentals

Today, there were a few major economic releases in the Euro Zone. The first one was the German Gross Domestic Product, measuring the total value of all goods and services produced by Germany was reported by the Statistisches Bundesamt Deutschland. The forecast was positioned for a rise of +0.4% in the second quarter of 2015, compared with the preceding quarter. The outcome was in line with the expectation, as the German Gross Domestic Product rose +0.4%.

In terms of the yearly change, the German Gross Domestic Product increased +1.6% in second quarter of 2015, compared with the same quarter a year ago.

The German business sentiment index was also released today by the CESifo Group. The market was expecting a decrease from the last reading of 108 to 107.8 in August 2015, but the result was better, as the German IFO business sentiment index climbed to 108.3.

There was no upside reaction noted in the Euro after the release, instead the EURUSD pair declined to trade near $1.1450.

 

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Article by Tom Daly, Academy of Financial Trading

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