Recent releases out of Germany, the Eurozone’s largest economy, have been cause for optimism. The January forecast for German Consumer Climate came in at 9.0 points, a notch above the estimate of 8.9 points. This marked the fourth straight rise for the indicator, pointing to stronger optimism from consumers as we head into the New Year. These strong numbers come on the heels of German Business Climate, which improved to 105.5 points, up from 104.4 a month earlier. This edged above the forecast of 105.4 points. On the inflation front, German PPI, which tracks manufacturing inflation, improved to 0.0% in November, up from -0.2% a month earlier. Like the consumer confidence indicator, this release is on an upward trend. Strong German consumer and business confidence numbers are welcome news, as the Eurozone economy continues to struggle.
EUR/USD has edged higher in the Asian and European sessions.
1.2143 is a strong support level.
1.2286 is a weak resistance line. 1.2407 is stronger. EUR/USD ratio is pointing to gains in long positions on Monday. This is not consistent with the pair’s movement, as the euro has posted slight gains. The ratio has a majority of long positions, indicative of trader bias towards the euro continuing to move to higher ground.