German Industrial Production fell by -4.0% vs. expectations of -1.5%. Moreover, the prior month was revised lower to +1.6% from +1.9%. Not real good news from the strongest member on the continent.
EURUSD looking corrective but why should it?
The EURUSD fell on the news and moved below the 100 hour moving average (blue line in the chart above at 1.26039). The low extended to near the low levels from last Tuesday and Wednesday (some sort of reverse head and shoulders developing?), and could go no farther.
On the topside, the 200 hour moving average (green line in the chart above at 1.2645 currently) remains a level that needs to be broken – and the price stay above – in order to get buyers more on board with a correction rally. Both yesterday and again today, the price of the pair moved above the moving average level, but could not close above the level. The price has not had an hourly close above the 200 hour moving average since September 17.
Overall, the EURUSD should go lower (see: “IF the German growth engine fails who would save Europe?), but it seems to be having some digestion problems caused by support found last week and again yesterday at the 1.2500 level (see video from the weekend by CLICKING HERE). I could beat the correction drum but will just sit quietly and see how the story plays out (i.e. watching 200 hour MA). Stay tuned.
