- EUR/USD has dropped below key hourly chart support.
- The single currency is struggling despite a strong bounce from China's factory output.
- The pair reversed lower from highs near 1.1170 on Thursday on strong US data.
The single currency remains under pressure on Friday even though China's Industrial Production experienced a bounce in December.
Dips below 100-hour MA
The pair has dropped below the 100-hour average at 1.1137, having reversed lower from the high of 1.1173 seen Thursday's US trading hours. The pair pulled back as
the dollar picked up a bid in response to the better-than-expected US Retail Sales data.
China data beats estimates
Industrial production grew by 6.9% in December, beating analysts’ forecasts of 5.9% by a big margin to register the fastest rate of growth since March. Further, Retail Sales grew by 8%, bettering forecasts of 7.9% growth, but remained unchanged from November.
The fourth-quarter GDP came in at 6% as expected, while the dragon nation reported the full-year growth at 6.1% – the slowest in 29 years.
Markets priced in China slowdown in 2019 and have been betting on a rebound since the last few weeks. The Industrial Production data suggests the economy likely bottomed out at the end of 2019 and may regain some poise, as widely expected.
So far, however, the euro hasn't benefitted from the upbeat China data. From a technical perspective, a failed breakout on the 4-hour chart has shifted risk in favor of a drop to 1.11.
A deeper slide may be seen if the US Industrial Production for December, due at 14:15 GMT, blows past expectations.
The Eurozone current account surplus and the final consumer price index reading for December are also scheduled for release in Europe, but may not move markets.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Latest Forex News
Editors’ Picks
EUR/USD tumbles to five-week low on rising US yields, energy crisis
EUR/USD has tumbled below 1.17, hitting the lowest since August 20 as Europe struggles with soaring gas prices and China suffers power cuts. Fed Chair Powell is set to testify and comment about the bank's recent taper signal.
GBP/USD drops below 1.3650 amid firmer dollar, energy crisis
GBP/USD is extending the drop below 1.3650, undermined by the US dollar's strength and the UK's fuel problem. The British army is on standby to mitigate fuel shortages. The pound ignores the hawkish comments from BOE Governor Bailey.
XAU/USD eyes $1730 and $1727 as next downside targets
Gold is off the lows but remains vulnerable amid the underlying narrative the Fed could announce a sooner-than-expected rate hike, as the TIPS market has also started pricing in higher future inflation.
Crypto markets prepare for a bullish October
Bitcoin price shows signs of bullish breakout as it traverses a falling wedge. Ethereum price also displays an optimistic outlook as it forms a descending parallel channel.
Conference Board Consumer Confidence Preview: Unhappy but still spending
The collapse of consumer optimism in August has not exacted the expected toll from American spending, the most important factor in sustaining the US economic recovery. August’s confidence reading at 113.8 was the lowest since February.