The euro-zone’s third largest economy contracted by 0.2% in Q3 according to the preliminary report, better than a drop of 0.4% that was expected, and definitely better than previous quarters. The economy shark by 2.4% on year-over-year basis, and dropped by 0.7% in Q2.
EUR/USD is ticking higher.
The Italian economy contracted for a fifth consecutive quarter. During this period, the unemployment rate soared. This GDP report provides some hope: contraction is slowing down. However, the dark clouds over Europe could mean that this is a temporary slowdown, not even growth, and that the Italian contraction could deepen once again, as the whole continent, including Germany, could suffer.
EUR/USD is now above 1.2750, but not going anywhere fast. Yesterday’s high of 1.2778 provides some resistance before the round 1.28 line. On the downside, 1.2690 provides some support.