EUR/USD – A slow start to the week as Germany continues to display weakness

• German trade data another sign of weakness
• Was the reaction to US jobs data a bearish signal?
• EURUSD testing key resistance once more

Not the most thrilling start to the week, with the US bank holiday naturally bringing with it a more peaceful opening session but markets in Europe have started fairly well.

Perhaps there’s some carryover from last week – I’m still surprised at the lack of movement from the jobs report – or the prospect of a stimulus-induced boost to China’s economy. Or maybe there’s nothing much at all behind what’s happening today and we’re just getting back into the swing of post-summer break trading.

August was far from encouraging and the narrative appeared to follow quickly behind – interest rates will stay higher for longer, recessions are coming for us all, etc. There may have been too much read into the trade of the last month – I may be proven wrong – but I suspect we’ll know over the next couple of weeks how much that will show to be the case.

The economic data today has been minor both in terms of numbers and impact/interest. German exports slumped again which won’t come as a surprise to many given how they’ve performed for so long, teetering on recession and maybe so again. Global trade has suffered considerably and Germany seemingly particularly so, with China’s sluggish demand clearly not helping.

How bearish was the reaction to the US jobs report?

Rather than give EURUSD some reprieve last week, trading after the jobs report saw the pair end near the weekly lows which arguably doesn’t make a huge amount of sense given how well the numbers will have sat with the doves on the FOMC.

EURUSD Daily

Source – OANDA on Trading View

It could also be a bearish signal for the pair that something that arguably should have been bullish failed to deliver such a move. It’s now trading back around 1.08 and that support around the 200/233-day simple moving average band may be looking a little vulnerable.

Especially after such a shallow retracement to the 38.2% Fibonacci retracement level last week. A move below the low from two weeks ago could further reinforce that and pile pressure on the SMA band.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.