Release Time:2019-02-12 02:23
EURUSD (1.1339) • Germany’s Trade Balance fell to EUR13.9bn in Dec, the smallest surplus in nearly two years but the details revealed a healthy jump in exports (+1.5%) and imports (+1.2%) in the month. French Industrial Production rose a stronger than expected 0.8% M/M in Dec, meanwhile. Despite the recent focus on soft European data and the drop in longer term bond rates, Eurozone/US spreads are holding near recent lows; spreads remain very USDsupportive at near 300bps but we think the spot market has failed to register the relative improvement in the gap. EURUSD looks soft in the short run but we are not persuaded that there is much more downside potential in the market at the moment from a fundamental point of view. EURUSD short-term technicals: neutral/bearish – EURUSD is steadier, having found support in the low 1.13s over the past 24 hours. Intraday gains through 1.1365/70 are needed to prompt additional gains on the day, however.
Trend momentum signals remain bearishly aligned across a range of timeframes, which rather suggests that downside risks persist. We look for firm support in the low 1.13s through to 1.1300/10.