EURUSD trades slightly higher above the 1.08 mark after yesterday tested the strong support at 1.0774. Latest GDP data released by Destatis showed that the first quarter Germany GDP contracted by -2.2% in line with expectations. The reading for the fourth quarter of 2019 was at 0%. That was the sharpest quarterly drop since 2009. On the year, the German economy contracted by 2.3%.
The German Economy Ministry Economic said that the contraction would accelerate in the second quarter. The recession should have reached its low point in April. The Ministry sees a turnaround at the beginning of May.
In other data released earlier today, the Germany Producer Price Index (PPI) came in at -0.7% below the consensus of -0.6% in April, the yearly reading came in at -1.9%, also below the expectations of -1.8%. France Consumer Price Index (CPI) came in at 0%, below the expectations of 0.1% in April, the yearly reading registered in at 0.4% below the expectations of 0.5%. The Inflation ex-tobacco increased to 0% in April from the previous -0.1%.
In Italy, the Industrial Sales seasonally adjusted plunged to -25.8% in March from previous -2.1%. The Industrial Orders fell to -26.5% in March from previous -4.4%.
Trump Now Supports A stronger USD
Weak economic data weigh on the common currency while the change in Donald Trump’s view which now endorses a strong USD might further pressure Euro. Meanwhile, the EU leaders have not yet been able to reach a viable agreement on a common coronavirus bond to offset the economic impact of the COVID-19 outbreak.
EURUSD is 0.08% higher at 1.0812, as the pair slides towards and below the 1.08 mark. The technical outlook is clearly bearish now, while a break below the strong resistance at 1.0774 might accelerate the selling pressure toward the yearly lows.
On the upside, the first resistance for EURUSD stands at 1.0819 the daily top. If the pair breaks that resistance then the next target is at 1.0896 the high from May 13 session. The next supply zone for the EURUSD pair is at 1.0915 the 50-day moving average.
On the flip side, immediate support for the EURUSD pair stands at 1.0793 the daily low. Next support level for EURUSD would be met at 1.0774 the low from May 7. If the EURUSD pair breaks that support level, then the next target for sellers is at 1.0724 the low from April 24.