The euro was able to continue its upward correction in the first half of the day after a more than optimistic report on the growth of the eurozone economy in early 2019. Despite the uncertainty of global economic growth and the prospects for international trade, such indicators can return hope to traders to resume talks from the European Central Bank on raising interest rates in the Eurozone next year.
According to the EU Statistics Agency, the eurozone's GDP in the 1st quarter of this year grew by 1.5% on an annualized basis, after rising by 0.9% in the 4th quarter of 2018. Compared to the same period last year, eurozone GDP grew by 1.2% in the first quarter.
Traders also took a positive view of the unemployment report in the Eurozone, which in March this year fell to 7.7% against 7.8% in February. Economists had expected unemployment to remain unchanged.
A good contribution to the overall GDP growth was made by the French economy, which continued to grow steadily in the 1st quarter of 2019 due to the recovery of consumer spending.
According to the statistics agency Insee and the first preliminary estimate, France's GDP in the first quarter of this year grew by 0.3% compared with the previous quarter, which coincided with the forecasts of economists.
Inflation in France was worse than expected. Thus, the CPI consumer price index in April rose only by 0.2% compared to March, where the growth was recorded at 0.8%. Compared to the same period of the previous year, the growth was 1.2%. Economists had expected growth of 0.5% and 1.2%, respectively. France's consumer price index, harmonized by EU standards, rose 1.4% per annum in April against 1.3% per annum in March.
Spain also saw economic growth in the 1st quarter of this year. According to the report, the preliminary GDP of Spain in the 1st quarter increased by 0.7% compared to the 4th quarter of 2018 and 2.4% compared to the 1st quarter of 2018. Inflation in Spain increased by 1.6% per annum in April, with a forecast of 1.5%.
Good support for the European currency was provided by reports on the German economy, which continues to recover after a period of recession, which almost led to a recession.
According to the data, consumer prices in Germany rose in April due to prices for energy carriers and services. The report of the Federal Bureau of Statistics of Germany indicated that the consumer price index, harmonized according to EU standards, rose by 1.0% in April compared with the previous month and 2.1% compared with the same period of the previous year. Economists had expected growth of 0.5% compared with the previous month and 1.6% compared with the same period of the previous year.
Consumer confidence in Germany is also stable in May. According to leading data from the research company GfK, the consumer confidence index in Germany in May was at the level of 10.4 points, remaining unchanged compared with April. Economists had expected the figure to decline and be equal to 10.3 points.
The Gfk noted that the main factors constraining confidence include the uncertain situation around Brexit, as well as the trade conflict with the United States.
As for the technical picture of the EURUSD pair, the main focus of buyers will now be at the resistance level of 1.1240, above which it is unlikely to break through the first time. More acceptable areas for opening long positions in risky assets are reviewed after correction to the area of 1.1200 and 1.1180.