German data not supportive for EUR/USD, but does it matter?

Europe is still plagued by lockdowns and restrictions.

EU (1)

Yikes!  Whereas the rest of the world is beginning to recover from the economic downturn caused by the coronavirus, Europe is still plagued by lockdowns and restrictions.  Germany is said to extend their lockdown until March 28th, a full 4 weeks after the UK is set to begin reopening.  As a result, German employment and retail sales were on the weak side.  Germany’s Unemployment Change for February was +9,000 vs -13,000 expected.  The unemployment rate was unchanged at 6%, however that may be due the people dropping out of the labor force during the lockdowns (i.e., people not looking for work).  Adding insult to injury, Retail Sales for January was -4.5% vs -0.3% expected!  Germany has not been immune to the recent rise in yields either.  German 10 Year Bund yields rose nearly 30bps during February.  The combination of worse data and higher yields may cause the ECB to intervene more aggressively in the bond market, as suggested by ECB’s Villeroy de Galhau and Panetta.

Forex market hours: when is the best time of day to trade forex?

The Euro has taken the data in stride; stocks are pushing higher today, which seems to be bringing the EUR/USD along with it. After trading in a sideways channel for 2021, the pair tried to move higher on February 25th.  However, a weak US Treasury auction caused the US Dollar to go bid and price action in EUR/USD formed a shooting star; causing the pair to close back within the range.  However, on the continued move lower today, price briefly spiked below the phycological 1.2000 round number and reversed higher.  If price closes today above 1.2101, the daily candlestick will be bullish engulfing and would suggest a move back towards 1.2183 is possible (Friday’s high and horizontal resistance).

Source: Tradingview, City Index

EUR/USD is currently banging its head up against the 38.2% Fibonacci retracement level from the Feburay 25th highs to today’s lows near 1.2088.  For your guide, the 50% retracement level is at 1.2118 and the 61.8% Fibonacci retracement level is  at 1.2147.  Support is back at today’s lows near 1.1993, ahead of the YTD lows at 1.1953. 

Source: Tradingview, City Index

Later the Euro Area will release the Markit Services PMI Final and PPI.  Expectations are for the Services PMI to be bad.  Even if the number comes out better than expected, it is still likely to be bad!  However, PPI is expected to be 1.2% MoM for January vs 0.8% last.  If PPI has beats expectations, EUR/USD may have more room to go on the upside as Produce Prices are expected to feed through to consumer prices, thus creating inflation!

Learn more about forex trading opportunities.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.