The euro weakened this morning after the release of industrial production data in Germany and the EUR/USD pair dropped below the 1.225 level. In the meantime the dollar is also facing pressure after news regarding escalating tensions between the U.S. and China. The markets are waiting for the release of non-farm payrolls. Support is set at 1.22, resistance at 1.23.
The common European currency is once again facing pressure after new data release. Industrial production in Germany was weaker-than expected and suggest a slowdown of the UE’s biggest economy. Month on month the reading came at -1.6% while 0.2% was expected. Year on year 2.6% reading was seen, while 4.3% was expected. Retail PMI also disappointed, coming at 51.5. In light of the last batch of data this may suggest the EBC may be forced to delay the ending of its quantative easing program and monetary policy normalization.
Strong market uncertainty is back on the markets, which were able to catch a breath for just one day, but news pouring in from Washington reignited the fears and tension. We’re currently seeing an exchange of blows between the U.S. and China. In a statement released on Thursday Donald Trump informed the administration is considering an increase in the tariffs for Chinese goods by another 100$ billion.
Pic.1. EUR/USD chart.
The EUR/USD pair dropped below the 1.225 level and the markets are facing uncertainty amid the tensions between the U.S. and China. The main driving factor for the pair today will be the release of non-farm payrolls if nothing new emerges regarding the escalated tensions. If the reading comes below the expected 185k, the dollar may come under pressure and the pair may climb towards the 1.23 level.