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German Industrial Production Data Supported EUR / USD

Oct 8 2019, 03:44 PM (BDT) |

Positive data on industrial production in Germany supported the EUR / USD pair at the beginning of the European trading session. According to the presented report, in August the volume of production increased by 0.3%, while the forecast was -0.2%. For the better, the data for the last month were also revised, from -0.6% to -0.4%. At the same time, production volumes in Germany decreased by 4.0% over the year, while the forecast was -4.3%.

But, despite local growth, the potential for further recovery of the EUR / USD pair remains limited. Most macroeconomic indicators in the EU still indicate the prevalence of negative trends in the economy. Pressure on the European currency exerted by uncertainty associated with Brexit.

The dollar is trading mixed at the beginning of the week. Investors expect the start of trade negotiations between the US and China and the publication of the minutes of the last FOMC meeting, at which it was decided to reduce the rate by 25 bp. At the North American trading session, it is worth paying attention to the statement by the head of the Fed Jerome Powell and the publication of data on the producer price index.

On the chart, buyers can not cope with the level of 1.0995. The third attempt to gain a foothold above was unsuccessful. Accordingly, today the scenario with the formation of a retreat in the direction of the level of 1.0945 has more priority.

Resistance levels: 1.0995, 1.1025, 1.1085.

Support levels: 1.0945, 1.0915, 1.0890.

The main scenario is a resistance retest at 1.0995 and a decline to 1.0945.

An alternative scenario is a breakdown of resistance at 1.0995 and an increase to 1.1025.

The general fundamental background on the market can be described as neutral. On the graph there is a signal in the direction of the formation of a retreat. Inside the day we consider shorts from the level of 1.0990.

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