German Trade balance fell to 14.6B from 15.4B as exports dropped 3.4%, much more than analysts forecast of a 0.5% decrease. Data shows exports to European Union are down by 4.0%, while exports to the greater Eurozone fell by 5.7%.
Something to cheer would be exports outside Europe, which are up 5.6% y/y, suggesting that the rest of the world have found their feet while Eurozone continue to struggle.
15 Minutes Chart
EUR/USD did not move much immediately after the news, but a downward trend is observed with price testing the intraday support just above 1.31.
Germany’s Merkel, Greece’s Samaras and EU’s Rehn are scheduled to meet in Berlin conference later at 8.30am GMT, with German Factory Orders coming in at 11am. EUR/USD is likely to break away from its current 30~40 pip range and especially with more Euro-zone data scheduled to release in the next few hours.
A continuation of bad data could result in EUR/USD breaking below 1.31 to open up 1.30. While any sign of progress from the Berlin conference will rejuvenate much needed confidence in the EZ to and allow bulls to push back to consolidation zone between 1.315 – 1.32.
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