The growth of the euro continues on Thursday against fundamental data.
Retail sales in Germany were down 1.7% against forecast for 0.1%. German unemployment unexpectedly declined in January. The number of people out of work fell 16,000. The rate of unemployment dropped from 6.8% to 6.9%. Now it is clear that decline in the unemployment rate is of no use if the economy does not expand. Industrial production in Japan rose 2.5% in December vs. forecast for 4.1% and fell 7.8% annually against drop for 5.6%.
As it was expected US data was weaker than it was forecast; Personal spending (making about 70% of the US GDP) grew 0.2% against forecast for 0.3%. Personal income increased by 2.6% against 0.8%, but the growth is due to dividend payouts amid fears of tax increase on dividends since January 2013. Initial Jobless Claims rose 368K against 350K.
News agencies commentaries appealing to investors’ optimism mean the market is ruled by the speculative forces, removing sellers’ stop losses. The stock markets are falling.
US Nonfarm Payrolls, the most relevant news of the day is expected to be released at 17:30 GMT+4. It is forecast to be 165K against 155K in December. It is expected to be lower than forecast as data correlates with foreign borrowings through increase in production. We consider investors will not express optimism after it and sells will be started.
At 19:00 GMT+4 ISM manufacturing index in January is published, forecast 50.6 against 50.7 in December.
From the technical point of view bearish targets are defined by support lines of trend lines on the H4 1.3548, 1.3518, and 1.3480.
