EURUSD, 60 min
German March GfK consumer confidence unexpectedly rose to 9.5 from 9.4 in the previous month. Expectations had been for a dip amid market turmoil and growing uncertainty about the economy outlook, but at least German consumers are more upbeat. This seems to be largely due to a sharp rise in personal income expectations in February, which offset slightly less optimistic business cycle expectations. The willingness to buy remained steady at very high levels and the willingness to save turned slightly less negative. A surprisingly good result, which is a reflection of a robust labour market and rising wages, although if overall business confidence declines further and orders and production don’t improve, this will also feed through the labour market and consumer confidence. Consumption alone can’t drive the recovery forever.
There was no notable impact on the EURUSD from the news. After finding support near my target 2 area (blue boxes refer to old targets that were reached) the pair is now trading near 50% Fibonacci level that coincides with a resistance at 1.1047 and the upper end of the price channel. In 60 min timeframe the pair is also overbought as per stochastic oscillator. This suggests the line of least resistance is down intraday today. The pair has also formed a daily pin bar which tells about daily downside momentum slowing down. However, the nearest resistance levels at 1.10700 aren’t far away. We might therefore see a rally attempt from levels near 1.0956 support and then weakness again between 1.1070 and 1.1136.
Janne Muta
Chief Market Analyst
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