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Volume and Volatility Extremely Constr

The EUR/USD pair reacted mildly to the latest German industrial production data that revealed that the economy is slowing. 

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  • Sell the EUR/USD pair and set a take-profit at 1.0630.
  • Add a take-profit at 1.0790.
  • Timeline: 1-2 days.
  • Set a buy-stop at 1.0750 and take-profit at 1.0850.
  • Add a stop-loss at 1.0650.

The euro against the US dollar price has gone nowhere this week. The EUR/USD pair was consolidating at the psychological level of 1.0700 as volume and volatility remained sharply lower than in the past few weeks.

The EUR/USD pair reacted mildly to the latest German industrial production data that revealed that the economy is slowing. According to the statistics agency, industrial production rose by 0.3% on a MoM basis, an improvement from the previous -2.1%. The country’s industrial production rose by 1.6% on a year-on-year basis.

Therefore, there is a likelihood that the optimism that we saw earlier this year is starting to give way. Additional reports revealed that international and local order books have started thinning rapidly. Just last week, data revealed that the country’s manufacturing PMI dropped in March. The same trend is happening in other countries like France, Italy, and Spain.

The EUR/USD will next react mildly to the upcoming European GDP data. While these are important numbers, their impact on the pair will be muted since it is the second estimate. Based on the last two estimates, analysts expect that the economy avoided a technical recession in Q1.

Expectations are that the economy remained unchanged in Q1 and expanded by 1.2% on a year-on-year basis. It jumped by 1.8% in the previous quaerter. Eurostat will also publish the latest employment change data.

The EUR/USD pair will also react mildly to the latest US initial jobless claims numbers. These numbers are expected to show that initial claims remained in the 230k range. In the past four weeks, the average initial claims has been over 209k.

The EUR/USD pair has been going through low volatility and volume this week because of the light economic calendar. The pair has moved below the 61.8% Fibonacci Retracement level. It has moved slightly below the 50-period moving average and the dots of the Parabolic SAR.

The MACD has moved close to the neutral point. Therefore, the pair will likely remain in this range in the next few days. The next key data that will be of importance to the pair will happen in the coming week when the US publishes the latest inflation data.


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