Single currency slumps lower over weak German growth figures

Euro sold lower

The euro currency fell sharply lower against the US dollar and the British pound this week after the German economy posted its weakest growth figures in five years. The Germany economy expanded just 1.5 percent during 2018, which was a significant decrease from the previous years 2.5 percent growth rate, raising fears that the German economy could slip into a recession in 2019. German GDP contracted -0.2 percent in the third fiscal quarter, most economists now believe German growth is likely to remain depressed during the fourth fiscal quarter. The EURUSD pair tumbled below the 1.1400 level following the weaker growth figures, while the EURGBP pair slid below the 0.8800 level.

• The EURUSD pair is strongly bearish while trading below the 1.1400 level, key support is found at the 1.1300 and 1.1210 levels.
• If the EURUSD pair trades above the 1.1400 level, further upside towards the 1.1460 and 1.1490 levels remains possible.

Pound speculation

The British pound gained ground against the US dollar, Japanese yen, New Zealand dollar and the euro currency this week, despite British PM Theresa May’s Brexit deal being voted-down in UK Parliament. British pound traders grew increasingly confident that Brexit maybe cancelled altogether or the United Kingdom’s departure from the EU may be extended, which helped to underpin the overall bid-tone towards the currency. The GBPUSD pair experienced extreme volatile on the day of the Brexit deal vote, as it fell to 1.2667, before recovering earlier losses and gaining towards the psychological 1.3000 level.

• The GBPUSD pair is bullish while trading above the 1.2810 level, key resistance is found at the 1.2930 and 1.3000 levels.
• If the GBPUSD pair trades below the 1.2810 level, sellers could test towards the 1.2750 and 1.2667 levels.

Cryptocurrencies drift lower

The broader cryptocurrency market came under pressure this week, with Bitcoin, Ethereum and Litecoin all drifting lower. The overall crypto market also suffered from poor trading activity, as a marked decline in trading volume was seen across the cryptocurrency space. Bitcoin remained depressed below the $3,660 level, while Ethereum fell back towards the $110.00 level, after looking relatively bullish at the start of January. Litecoin dropped to its weakest trading level since January 1st this week, as the LTCUSD pair succumbed to heavy technical selling towards the $28.00 level, as the eight largest cryptocurrencies failed to launch a meaningful rally.

• The LTCUSD pair is bearish while trading below the $33.00 level, key support is found at the $28.10 and $25.00 levels.
• If the LTCUSD pair moves above the $33.00 level, buyers may test towards the $35.50 and $43.00 resistance levels.

Chinese data softens

The Chinese economy posted much weaker than forecasted trade data this week, as exports during the month of December slumped -4.4% on a year-on basis. The drop in Chinese exports was the largest point drop in over two years and a stark contrast to the previous December’s reading of +5.4%. The Chinese economy also posted much softer import data, pointing to weakening domestic demand, and Chinese companies previously front running orders before US trade tariffs officially commence. The Australia dollar and the New Zealand dollar fell as the Chinese trade figures were released, both the Australian and New Zealand economies rely heavily on the overall health of the world’s second-largest economy.

• The AUDUSD pair is bearish while trading below the 0.7220 level, key support is found at the 0.7110 and 0.7000 levels.
• If the AUDUSD pair trades above the 0.7220 level, buyers may test towards the 0.7280 and 0.7340 levels.