RidetheMacro| EURUSD Market Commentery 2020.09.23
🎈 Given the absence of important fundamental statistics today, the pressure on the euro was also limited in the first half of the day. After an unsuccessful attempt to break below the monthly lows, the pair returned back to the opening level.
🔑 From a technical point of view, nothing has changed. Bears will continue to focus on breaking through and fixing below the low of 1.1635. If the pair easily reaches the level, it may drop to new support levels of 1.1600-1.1550 and 1.1535. If the price returns to 1.1770, the buyers will become more active. However, if the quote goes above 1.1770, it may jump to 1.1820.⚠
🌡 Thus economists upwardly revised the situation in the German economy. It is expected that further growth will be no less active than in the summer period. as the GDP drop in the second quarter was less than expected.
📍 However, the worsening epidemiological situation will shape the control measures and social distancing that could be imposed later. Moreover, if the EU and the UK fail to sign an agreement 🔴, a new trade war may break out.
📍 As far as the labor market is concerned, the number of unemployed people in Germany in 2020 is expected to rise to 2.7 million compared to 2.3 million last year. In 2021, the indicator could fall to 2.6 million.
📌 German consumers currently show two directions. There is the direction of a high willingness to spend, while at the same time the willingness to save is still much higher than prior to the crisis. since the end of 2019, the savings ratio of German households has more than doubled, to 20% in the second quarter. according to ECB study, the increase in the savings ratio in the entire eurozone is mainly driven by so-called forced, ie involuntary, savings. While this would imply that there is lots of pent-up demand once the economic situation stabilizes, the fact that wages dropped significantly in the second quarter suggests that the role of precautionary savings could be more important than suggested by the ECB study. In Germany, nominal wages dropped by 4% YoY in the second quarter on the back of short-term work schemes and the lockdown measures.
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