Baxia Markets
April 08, 2024

Trade Surplus Shrinks, Industrial Production Rises: EURUSD Affected

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German trade terms faced a setback in February as the trade surplus narrowed from €27.6 billion to €21.4 billion. Exports decreased by 2.0%, while imports saw an increase of 3.2%. However, despite this decline, German industrial production managed to rise by 2.1%, with notable growth observed across the automotive industry, which saw production surge by 5.7%.

Before the release of the German trade data, the EURUSD pair experienced fluctuations, dropping to a low of $1.08230 before later climbing to a high of $1.08432. However, following the publication of the German statistics, the EURUSD dipped to a low of $1.08339 before rebounding to a high of $1.08375.
Trade Surplus Shrinks, Industrial Production Rises: EURUSD Affected
By Monday, the EURUSD exchange rate had only marginally shifted, experiencing a modest 0.01% decrease to $1.08352. Despite the mixed reaction to the German trade figures, the market remained relatively stable.

On the 1-hour timeframe following the news release, the EURUSD market showed little bearish reaction to the lower-than-expected German Trade Balance. Instead, the market traded sideways within a narrow range. The positioning of the Exponential Moving Averages (EMAs) indicated a bullish sentiment, with the EMA 50 positioned above the EMA 200. However, caution was warranted as the narrow gap between the two EMAs suggested flat momentum.

Oscillator indicators further supported this assessment, with the Moving Average Convergence Divergence (MACD) signal line hovering around the 0 line, and the Relative Strength Index (RSI) fluctuating around the midline at 50%. These signals collectively painted a picture of cautious optimism in the EUR/USD market, with traders closely monitoring further developments to determine the direction of future price movements.

In summary, the release of German trade data had a mixed impact on the EURUSD exchange rate, resulting in relatively minor fluctuations. Despite the narrowing trade surplus, bullish sentiment prevailed in the market, supported by technical indicators suggesting potential upward momentum in the near term. Traders remain vigilant for any new developments that could influence the direction of the currency pair.

Key Takeaways:

  1. German trade surplus narrows to €21.4 billion in February.
  2. Exports decline by 2.0%, while imports rise by 3.2%.
  3. Industrial production in Germany sees a 2.1% increase.
  4. EUR/USD experiences fluctuations before and after the release of German trade data.
  5. Market sentiment remains cautiously bullish despite mixed reaction to the trade figures.


Key Economic Releases to Watch Today

EUR, German Trade Balance

Actual 21.4B vs Forecast 25.1B vs Previous 21.4B



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