The Euro: the Risk of falling increased after weak Eurozone data

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The Eurozone is “pleased” with another weak performance. In December, industrial production decreased by 0.9% against expectations for a 0.4 percent drop. Moreover, the decline in activity was the highest since the global financial crisis. The fact of the deterioration indicator is not surprising – manufacturing activity weakened in the fourth quarter mostly because of Germany. More importantly, there is a real threat to the continuation of slowdown at the beginning of 2019.
The Euro, which quickly abandoned attempts to recover, is under pressure after yet another disturbing release. EURUSD barely held above the 1.13 mark, which is still under threat. In many respects the further pair’s dynamics will depend on the behavior of the dollar. The us currency is feeling not as confident as the previous days, but still demonstrates desire to defend their positions. Perhaps the bulls decided to take a break before the new breakthrough, the implementation of which will depend on General market sentiment.
The focus is on trade talks between Washington and Beijing. On the one hand, for the dollar to as defensive optimism in the stock markets is a limiting factor. But the resolution trade disputes contributes to the growth of investment attractiveness of the USD, and at the moment this factor outweighs.
The Euro, which yesterday noted at 3-month lows at risk from the European statistics Brekzita and the return of General fears for the world economy. In the short term risks for the pair is still biased in a negative direction.
Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS