Top investment manager and financial market journalist, Shaun Osborne, Chief FX Strategist at Scotiabank, analyzes the recent French and German Industrial Production data for July. The data came in significantly weaker than expected, raising concerns about the Eurozone economy’s lack of momentum. However, the Euro (EUR) only saw a slight dip to 1.1120 before stabilizing.
EUR Shows Renewed Upside Momentum
Osborne attributes the recent gains in the EUR to lower USD yields and narrower short-term spreads between the Eurozone and the US. This support has helped the EUR maintain its upward trajectory, with spot gains pushing it through the 1.11 zone. The technical indicators align with this bullish momentum, suggesting limited downside potential for the EUR and maintaining a positive outlook.
Looking ahead, Osborne highlights a key resistance level at 1.1200, but emphasizes that a weekly close above 1.1160 would be a positive signal from a technical standpoint.
Analysis
The weaker-than-expected Industrial Production data from France and Germany has raised concerns about the Eurozone economy’s momentum. However, the EUR has shown resilience, with support from lower USD yields and narrowing spreads. The technical indicators point towards continued upside momentum for the EUR, with key resistance levels to watch. Overall, investors should keep an eye on economic data releases and global market trends to make informed decisions about their finances.