EUR/USD is marginally up amid mixed German economic data
- EUR/USD inches up with the pair navigating close to the 200-day moving average.
- German GDP contracts in Q4 2023, while Ifo business climate index shows slight improvement.
- Fed officials maintain cautious stance on rate cuts, despite solid US economic indicators.
The Euro prints gains against the US Dollar during Friday's North American session but still circa the 200-day moving average (DMA) at 1.0826, amid an absent economic calendar in the United States (US). Data from the Euro area (EU) witnessed its largest economy shrinking while business sentiment improved. The EUR/USD trades at 1.0827, up a minuscule 0.04%.
EUR/USD hovers around 200-DMA as German economy contracts and business sentiment slightly improves
Data from the EU revealed that the German economy contracted -0.3% as expected on a quarterly basis in Q4 2023, according to Destatis. Annually based, the Gross Domestic Product (GDP) shrank -0.2%. Further data revealed that the business climate in Germany slightly improved from 85.2 to 85.5, according to the Ifo Institute.
Across the pond, the US economic calendar is absent though the latest unemployment claims figures and solid S&P Global Flash PMIs justified Fed officials’ hawkish commentary. Policymakers stated they’re ready to ease policy but not in a rush, as recent economic data solidifies that the economy is strong, which could reignite inflationary pressures.
The CME FedWatch Tool depicted traders aligning with the latest Fed projections, with officials estimating three rate cuts, as revealed by the latest Summary of Economic Projections (SEP) in December 2023. As of writing, traders have priced in 81 basis points (bps) of easing toward the end of 2024.
EUR/USD Price Analysis: Technical outlook
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
