Good day forex traders,
It is time to take a look at the EUR/USD situation. In the previous EUR/USD review we noted that the currency pair is falling due to a strengthening US dollar. It is important to monitor on the shorter time frames.
On the flip side, any bullish recovery will need to breach 1.08.
From a fundamental point of view, the euro area remains slow in terms of an economic progress. Bloomberg reports,
” German economic growth slowed to the weakest pace in a year last quarter, a reminder of the fragility of the euro area’s recovery in a time of rising uncertainty.
The slowdown in Germany to 0.2 percent, along with a resumption of growth in Italy and France, left expansion in the 19-nation currency region at 0.3 percent, in line with an initial estimate and matching the pace of the three months through June.
As Europe’s biggest economy, Germany’s fortunes are key to the recovery of the euro region, where the economy’s expansion is stuck at mediocre levels. That backdrop will color the European Central Bank’s review of its stimulus program in less than four weeks, when it will also have to factor in a global outlook characterized by the rise of populists critical of international trade deals.
“The economy is growing in the euro area but still not quite helping the ECB meet its price-growth target of 2 percent,” said Ralph Solveen, head of economic research at Commerzbank AG in Frankfurt. “It’s probably not enough to satisfy them, and we think they will have to extend stimulus in December.” ”
Germany is the euro area biggest economy and hence a weaken German economy will likely be a drag to the union. Should the European Central Bank extend stimulus, the easy credit conditions may further weaken the euro.