The European currency stopped its decline at the lows of last week, and it is possible that the pause will be delayed. However, the market is still on the side of the sellers of the euro, as after Friday's data on the US labor market, the probability of the Federal Reserve lowering interest rates has significantly weakened, which gives traders hope for the continued strengthening of the US dollar against a number of world currencies.
Data on industrial production in Germany today attracted special attention of traders in the morning for a number of reasons. First, the problems in the industrial sector are growing stronger and stronger every day, and the further situation largely depends on trade conflicts, and secondly – these data were the most significant for today and could change the situation in the market in the short term, which, incidentally, did not happen.
According to the report of the Federal Bureau of Statistics of Germany, industrial production in Germany in May this year increased, but only slightly due to a serious decline in the construction sector.
Thus, the total volume of industrial production, which includes production in the construction sector, in the manufacturing and energy industries, in May this year increased by only 0.3% compared to April, which fully coincided with the forecasts of economists.
It is worth noting that after a serious fall in April, in May, production stabilized slightly, which leaves a chance of resuming growth in the near future. However, as stated in the Ministry of Economy of Germany, the problems in the industrial economy will continue in the coming months, which is directly related to the sharp weakening of orders and deteriorating business conditions.
As noted above, production in the construction sector decreased by 2.4% in May 2019 compared to the previous month, while the maximum growth was observed in the manufacturing sector by 0.9%. Compared to May 2018, industrial production decreased by 3.7%.
As for the technical picture of the EURUSD pair, it remained unchanged compared to the morning forecast.
At the moment, the large support is located in the area of 1.1205, the breakthrough of which will provide a further bearish trend by new sellers, whose goal will be the lows in the area of 1.1160 and 1.1110. If the bulls try to correct the situation, the upward correction will be limited by a large resistance in the area of 1.1260, where the upper limit of the downward channel passes.