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The euro remained at its intraday low, ignoring the weak report on inflation in Germany, as well as the decline in industrial production in the eurozone, which clearly indicates a slowdown in economic growth in the 2nd quarter of this year.
Considering that the euro ignores even such data, the scenario of a continuation of an upward trend is observed, but this requires a quick return to the intermediate resistance level of 1.1310, without which it will be extremely difficult to expect growth.
According to the report, the rate of inflation in Germany slowed down in May of this year, which is another proof that the economy continues to lose momentum.
The report indicates that in May 2019, compared with April, consumer prices rose by only 0.2%, which fully coincided with a preliminary estimate. The annual inflation rate was 2%, which suits the ECB. Harmonized by EU standards, Germany's consumer price index rose in May by 0.3% compared with April, and compared with May last year it increased only by 1.3%.
The statistics bureau of Germany noted that the main pressure on inflation was created by a slower increase in tariffs for air and railway tickets, as well as lower prices for tourism, which is directly related to the calendar factor.
The euro remained in its position after the release of data which indicated a decline in industrial production in the eurozone. According to the report, industrial production fell by 0.5% in April of this year compared with March, while economists had expected a decline of 0.4%. Compared to the same period in 2018, the decline was 0.4%, while the forecast was for a fall of 0.7%.
The predominant decline in production is based on trade wars and lower exports, which also contributes negatively to various sectors of the economy.
The euro held its ground, as many traders feared that the data would be even worse due to industrial production in Germany, which also dropped sharply.
As for the technical picture of the EURUSD pair, support in the pair shifted to the area of 1.1280. As long as traders keep this level, we can expect the demand for risky assets to remain and the return of the trading instrument to a high of 1.1340 by the end of the week. If at the US session there is a break of support at 1.1280, the pressure in the pair will increase, which will lead to new local low in the area of 1.1250 and 1.1200.
The British pound continued its decline after the leading candidate for the post of British prime minister, Boris Johnson, presented his plan to withdraw the country from the European Union by October 31.
It discusses many options, including the UK exit without a deal.
The former British Foreign Secretary announced that he intends to begin preparations throughout the country for the consequences of withdrawing without a deal if the EU does not accept the new conditions that he offers in the event of his victory. According to many experts, this position will make a serious negative contribution and damage the UK economy.
As for the technical picture of the GBPUSD pair, trade remains in the wide side channel, where, on the one hand, there is support around 1.2650, and on the other hand, the upward potential is limited by this week's highs around 1.2760. Only going beyond these ranges will determine the future direction of the British pound in the short term.
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