Key Points
- The euro weakened against the US dollar recently, and looks set for more losses in the short term.
- The EURUSD pair is currently forming a breakout pattern, which may play a major role for the next move.
- The German Trade Balance released by the Statistisches Bundesamt Deutschland posted a trade surplus of €22.2B in May 2016.
- The German Exports of goods and services declined by 1.80% in May 2016, compared with the expectation of an increase of 0.25%.
Technical Analysis
The Euro traded towards the 1.1030 level against the US Dollar recently, and later started to correct higher. The EURUSD pair is currently forming a contracting triangle pattern on the hourly chart, which may act as a breakout pattern for the next move.
The triangle resistance is aligned with the 100 and 200 hourly simple moving averages, which is a bearish sign for the Euro bulls.
On the downside, a close below the triangle support trend line could push the pair back towards the last swing low of 1.1030.
German Trade Balance
Earlier today, the Trade Balance, which is a balance between exports and imports of total goods and services was released by the Statistisches Bundesamt Deutschland. The market was expecting a trade surplus of €23.8B in May 2016. However, the outcome was lower, as the trade surplus as €22.2B.
Moreover, the report added that “Germany exported goods to the value of 97.2 billion euros and imported goods to the value of 76.2 billion euros in May 2016. Based on provisional data, the Federal Statistical Office (Destatis) also reports that German exports increased by 1.6% and imports decreased by 0.1% in May 2016 year on year.”
Overall, as long as the EURUSD pair is below the 200 hourly simple moving average there are chances of more declines.
