Talking Points
- Euro was seen trading in a range versus the US Dollar and looks set for a move.
- There is a triangle formed on the hourly chart of the EURUSD pair, which is likely to act as a catalyst in the near term.
- German Gross Domestic Product was released earlier during the London session, which posted an increase of 0.3% in the first quarter of 2015, compared to the forecast of 0.5%.
Key Highlights:
German GDP
German CPI
EURUSD Technical Analysis
The Euro enjoyed decent gains against the US Dollar recently, as it traded close to $1.1260 where it found sellers. There is a contracting triangle formed on the hourly chart, which provides both upside resistance and downside support.
However, the pair is finding bids around the 100 and 200 hourly simple moving averages confluence area. The hourly RSI is above the 50 level, suggesting that buyers are in control in the short term. As long as the pair is above the 200 MA, the chances of EURUSD moving higher increases. A break below the mentioned MA might take the pair towards the triangle support trend line.
German GDP and CPI
Earlier during the London session, the German Gross Domestic Product was released by the Federal Statistical Office (Destatis), which measures the total value of all goods and services produced by Germany. The forecast was lined up for a rise of 0.5% in the first quarter of 2015, compared to the preceding quarter.
However, the outcome was softer-than-expected, as the German Gross Domestic Product only increased by 0.3%. In terms of the yearly change, it rose by 1.1% in Q1 2015, compared to Q1 2014. The report stated that the “economic performance in the first quarter of 2015 was achieved by 42.4 million persons in employment in the domestic territory, which was an increase of 275,000 or 0.7% on a year earlier”.
The German Consumer Price Index was also released around the same time, which came in better than the average forecast. The market was expecting the German CPI to decline by 0.1% in April 2015, compared to the preceding month. The report stated that there was no change in the CPI.
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Article by Tom Daly, Academy of Financial Trading
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