The euro continued to strengthen its positions against the US dollar, even despite a rather weak report on the growth of the eurozone economy in the first quarter of this year, which indicated a slowdown in GDP due to a sharp drop in exports of goods and services.
According to the EU statistical agency Eurostat, the gross domestic product in the 1st quarter grew by 1.5% per annum, whereas previously reported a 1.6% increase. Let me remind you that in the 4th quarter of 2017, the economy of the eurozone showed an impressive growth of 2.8%.
This report as a whole was ignored by the market, as it did not carry any new information. All this was already known to experts and economists, and the difference of 0.1% did not play any role. Moreover, many market participants are encouraged by the recent statements of the representatives of the European Central Bank, which talked about the return of economic growth rates already in the second quarter of this year, which will lead to the complete completion of the bond redemption program already this fall and will support the European currency in the medium term.
Good growth in consumer spending failed to neutralize weak data on exports, which in the 1st quarter of 2018 decreased by 0.4% compared to the previous quarter.
Orders in the manufacturing sector in Germany in April fell, indicating a possible slowdown in the economy in the second quarter of this year. According to the report of the Ministry of Economy of Germany, demand for orders in the manufacturing sector in April fell by 2.5% compared to the previous month, while economists forecast their growth by 0.6%.
Data on the US labor market, released in the afternoon, did not have a serious impact on the market and were of a purely statistical nature.
Thus, the number of Americans who filed new applications for unemployment benefits last week, declined. This indicates a stable nature of the US labor market.
According to the report of the US Department of Labor, the number of initial applications for unemployment benefits for the week from May 27 to June 2 decreased by 1,000 and amounted to 222,000. Economists predicted that the number of applications will be 220,000.
As for the technical picture of the EUR / USD pair, as I noted in the morning review, the whole accent is still shifted to resistance 1.1830, to break above which in the morning it was not possible. Given that important fundamental statistics are not scheduled for the second half of the day, demand for risky assets may continue, and a more sustained breakthrough in resistance at 1.1830 will enable the new large buyers to enter the market, which will lead the European currency to new and more serious monthly highs of 1.1880 and 1.1930.
