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24.11.2017 05:24 AM
Euro does not have enough momentum

The euro returned to the high of the day following the release of upbeat data for Germany and the eurozone as a whole, indicating a resurgence of economic growth in the 3rd quarter of this year.

According to the data, Germany's economy in the third quarter of this year has expanded due to growth in exports and investments of companies. The report of the National Bureau of Statistics of Germany Destatis says that the gross domestic product in the third quarter of 2017 increased by 0.8% compared to the previous quarter. Compared to the same period in 2016, GDP grew by 3.3%.

Germany's exports in the third quarter grew by 1.7% compared to the previous quarter, while investments increased by 1.5%.

The Manufacturing PMI in Germany also increased significantly, reaching 62.5 points, better than the forecasts of economists, who expected growth to reach 60.4 points.

The sentiment in the manufacturing sector of France rose in November. According to the report of the National Bureau of Statistics of France, Insee, the composite index of purchasing managers in France rose to 60.1 points in November, compared to 57.4 points in October. The Bureau of Statistics also pointed out that the broader indicator of confidence increased by two points in November, to 111 points.

The euro zone's purchasing managers index can also provide good support to the European economy, which will lead to an increase in demand for the European currency at the end of the year.

According to the research company IHS Markit, the index of supply managers in November 2017 rose to 57.5 points from 56.0 points in October.

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Minutes of the ECB did not lead to a new wave of growth in the euro.

The report indicates that the ECB management at the meeting in October had differed on the timing of the completion of the quantitative easing program. However, it agreed to assess the impact of the program of buying corporate bonds. It should be noted that the European Central Bank announced that it is extending the program of bond purchasing until September 2018. However, since December of this year, the volume of monthly purchases will be reduced to 30 billion euros from 60 billion euros earlier.

As a result of the Thanksgiving holiday in the US, market volatility remains low. The technical picture remained without significant changes.

Buyers of risky assets are prepared to enter new monthly highs. However, in order for this to happen it is necessary to break through a large resistance of 1.1840, which may lead to an increase in long positions and an update to levels like 1.1880 and 1.1910.

Jakub Novak,
Analytical expert of InstaForex
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