EUR/USD Falls to Support on Falling Industrial Output

European industrial production dropped by 0.2%. This comes despite solid figures from Germany and France, and falls below expectations for a rise of 0.4%. EUR/USD is testing low and critical support.

Before the release, EUR/USD was trading in a low range that followed yesterday’s drop, around 1.42.  It now trades lower, at 1.4180, still afraid of the important support line of 1.4160.

The rise of the euro had a role in weakening industrial output. The higher costs for importers overseas made European exports less attractive.

This release shows the significant gap between Germany and the other countries. While Germany posted a rise in industrial production (though a fall in factory orders), other countries didn’t enjoy the same growth, making the overall picture negative. It’s becoming hard for Germany to carry all the Euro-zone on its shoulders, and this is true for the debt crisis as well.

Significant support is found at 1.4160 which was a swing low a few weeks ago, and also a peak in the past. It’s followed by 1.4030. Resistance appears at 1.4282 and 1.4375.

For more lines and upcoming events, see the EUR/USD Forecast.

The Euro was hit yesterday by growing pessimism about Greece. Germany took its time with resolving the crisis, and in the meantime strikes in Greece turned violence. There’s no support for the austerity measures that Greek citizens suffer from – they don’t seem to help, and there’s no light at the end of the tunnel.