EUR/USD tilts higher after strong European industrial production data
- The EUR/USD pair tilted higher after the latest Eurozone industrial production data.
- Industrial production rose by 0.8% in April after rising by 0.4% in the previous month.
- The data came a few days after the ECB decision and ahead of Fed decision.
The EUR/USD pair tilted higher after the relatively strong Eurozone industrial production data. The pair rose to a high of 1.2120, which was relatively higher than the intraday low of 1.2092.
Eurozone industrial production data
The Eurozone industrial production sector did well in April as more countries reopened. According to Eurostat, the region’s industrial production rose by 0.8% in April from the previous 0.4%. This increase was better than the median estimate of 0.4%. As a result, the production rose at a year-on-year rate of 39.3% because of last year’s low base.
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The growth of the industrial sector was atributed to a 3.4% increase in durable consumer goods followed by 3.2% in energy. Capital goods and intermediate goods rose by 1.4% and 0.8%, respectively. The best performers in the bloc were countries like Belgium, Malta, and Estonia while the laggards were Denmark, Hungary, and Lithuania.
The strong industrial production data came a few days after the European Central Bank (ECB) delivered its interest rate decision. The bank left interest rates and quantitative easing policies unchanged. It also pledged to accelerate the pace of asset purchases.
Looking ahead, the EUR/USD pair will react to the latest Federal Reserve interest rate decision that will come out on Thusday. Analysts believe that the Fed will leave its monetary policy intact. Still, they will ne looking at whether the bank will insist that the recent strong numbers are transitory. A new hawkish tone will likely be bearish for the pair.
The pair will also react to a series of economic data from the United States. Some of these numbers will be retail sales, housing starts, producer price index (PPI), and building permits, among others.
EUR/USD technical analysis
The EUR/USD pair rose from an intraday low of 1.2092 to 1.2121. On the four-hour chart, the pair remains below the 25-day and 15-day moving averages. It has also dropped below the Ichimoku cloud while the Stochastic oscillator has moved above the oversold level. Therefore, the pair may resume the downward trend as bears target the 50% Fibonacci retracement level at 1.1982. However, a move above the resistance at 1.2140 will invalidate this prediction.