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Kiel Institute for the World Economy significantly downgraded its growth expectations for German economy, projecting a mere 0.1% increase in 2024, a sharp downward revision from its previous forecast of 0.9%. Slight improvement is anticipated in 2025, with growth expected to accelerate to 1.2%. On the inflation front, decline to 2.3% is projected for this year, down from 5.9% in 2023, with further reduction anticipated to 1.7% in 2025. Unemployment rate is expected to marginally decrease from 5.8% in 2024 to 5.6% in 2025.

Moritz Schularick, President of the Kiel Institute, pointed to a "whole range of factors" currently dampening sentiment and economic performance in Germany. These include global economic slowdown impacting exports, ECB's restrictive monetary policy expected to extend into the next year, and German government's austerity measures, which Schularick believes are being implemented at an inopportune time, fostering additional pessimism.

Stefan Kooths, Head of Economic Research at the Kiel Institute, added that despite gradual recovery expected over the year, the overall economic dynamism in Germany remains subdued. He underscored the emergence of signs indicating that structural issues are mainly to blame for the economic slowdown, with private investment falling short, partly due to the significant uncertainty provoked by current economic policies.

Full IfW Kiel release here.

EUR/USD started a fresh increase above the 1.0828 resistance. USD/CHF declined and now struggling below the 0.8860 resistance.

Important Takeaways for EUR/USD and USD/CHF Analysis Today

• The Euro rallied after it broke the 1.0828 resistance against the US Dollar.
• There is a connecting bullish trend line forming with support near 1.0845 on the hourly chart of EUR/USD at FXOpen.
• USD/CHF declined below the 0.8860 and 0.8850 support levels.
• There is a key contracting triangle forming with resistance near 0.8850 on the hourly chart at FXOpen.

EUR/USD Technical Analysis

On the hourly chart of EUR/USD at FXOpen, the pair started a fresh increase from the 1.0800 zone. The Euro cleared the 1.0828 resistance to move into a bullish zone against the US Dollar, as mentioned in the previous analysis.

The bulls pushed the pair above the 50-hour simple moving average and 1.0855. Finally, the pair tested the 1.0875 resistance. A high was formed near 1.0876 and the pair is now consolidating gains. There was a move below the 23.6% Fib retracement level of the upward wave from the 1.0798 swing low to the 1.0876 high.

Immediate support on the downside is near a connecting bullish trend line at 1.0845. The next major support is the 50% Fib retracement level of the upward wave from the 1.0798 swing low to the 1.0876 high at 1.0838.

A downside break below the 1.0838 support could send the pair toward the 1.0800 level. Any more losses might send the pair into a bearish zone to 1.0765.

Immediate resistance on the EUR/USD chart is near the 1.0855 zone. The first major resistance is near the 1.0875 level. An upside break above the 1.0875 level might send the pair toward the 1.0920 resistance.

The next major resistance is near the 1.0940 level. Any more gains might open the doors for a move toward the 1.1000 level.

USD/CHF Technical Analysis

On the hourly chart of USD/CHF at FXOpen, the pair started a fresh decline from well above the 0.8890 zone. The US Dollar dropped below the 0.8860 support to move into a short-term negative zone against the Swiss Franc.

The bears pushed the pair below the 50-hour simple moving average and 0.8840. Finally, the bulls appeared near the 0.8800 level. A low was formed near 0.8804 and the pair is now attempting a fresh increase.

On the upside, the pair could face resistance near the 50% Fib retracement level of the downward move from the 0.8892 swing high to the 0.8804 low at 0.8850.

There is also a key contracting triangle forming with resistance near 0.8850. The next major resistance is near the 61.8% Fib retracement level of the downward move from the 0.8892 swing high to the 0.8804 low at 0.8860.

If there is a clear break above the 0.8860 resistance zone, the pair could start another increase. In the stated case, it could even surpass 0.8890.

On the downside, immediate support on the USD/CHF chart is 0.8840. The first major support is near the 0.8815 level. The next major support is near 0.8780. Any more losses may possibly open the doors for a move toward the 0.8650 level in the coming days.

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• NZDUSD gets rejected after claiming 50-day SMA
• But the decline meets strong support at 200-day SMA
• Oscillators remain in their negative territories

NZDUSD had been in a downtrend since its rejection at 0.6373, which is the 78.6% Fibonacci retracement of the 0.6536-0.5772 region. Despite the pair’s attempt for recovery and its temporary break above the 50-day simple moving average (SMA), it reversed back within its short-term sideways pattern.

Given that both the RSI and MACD are tilted to the downside, the price might drop below the 200-day SMA and challenge the 38.2% Fibo of 0.6064. Sliding beneath that floor, the pair could descend towards the 2024 bottom of 0.6037. A violation of that region could set the stage for the 23.6% Fibo of 0.5952.

On the flipside, should the pair rotate back higher, immediate resistance could be found at the 50.0% Fibo of 0.6154, which overlaps with the 50-day SMA. Conquering this barricade, the bulls may attack the recent rejection region of 0.6217. Further advances could then cease around the 61.8% Fibo of 0.6244.

Overall, despite the break above the 50-day SMA, NZDUSD reversed back within its rangebound structure as the 200-day SMA provided solid support. Hence, the consolidation phase is likely to resume and hold for as long as the SMAs hold their ground.

Daily Pivots: (S1) 190.29; (P) 190.69; (R1) 191.06; More.....

Intraday bias in GBP/JPY remains neutral and range trading continues. Corrective pattern from 191.29 could still extend. Break of 188.02 minor support will bring deeper fall to 38.2% retracement of 178.32 to 191.29 at 186.33, as a correction to rise from 178.32. Nevertheless, on the upside, decisive break of 191.29 will resume larger up trend, and target 195.86 long term resistance next.

In the bigger picture, up trend from 123.94 (2020 low) is in progress. Medium term outlook will stay bullish as long as 178.32 support holds. Next target is 195.86 long term resistance (2015 high).

Daily Pivots: (S1) 162.54; (P) 162.99; (R1) 163.38; More...

EUR/JPY dips notably today as range trading from 163.70 extends. Intraday bias stays neutral first. On the downside, break of 161.67 minor support will bring deeper decline to 38.2% retracement of 153.15 to 163.70 at 159.66, as corrective pattern from 163.70 resumes. Nevertheless, firm break of 163.70 will resume whole rally from 153.15 to retest 164.29 high.

In the bigger picture, price actions from 164.29 medium term top are seen as a correction to rise from 139.05 only. As long as 148.38 resistance turned support holds (2022 high), larger up trend from 114.42 (2020 low) is expected to resume through 164.29 at a later stage. Next target would be 169.96 (2008 high).

Daily Pivots: (S1) 0.8534; (P) 0.8547; (R1) 0.8559; More...

Range trading continues in EUR/GBP and intraday bias remains neutral first. Considering bullish convergence condition in D MACD, decisive break of 0.8577 and 55 D EMA (now at 0.8572) will argue that fall from 0.8764 has completed. Intraday bias will be back on the upside for rebound towards 0.8713 resistance. Nevertheless, firm break of 0.8491/7 support zone will confirm larger down trend resumption.

In the bigger picture, fall from 0.8764 is seen as another leg in the whole down trend from 0.9267 (2022 high). Outlook will stay bearish as long as 0.8713 resistance holds. Break of 0.8491 will target 61.8% projection of 0.8977 to 0.8491 from 0.8764 at 0.8464.

Daily Pivots: (S1) 1.6658; (P) 1.6702; (R1) 1.6735; More...

Further rally is still expected in EUR/AUD with 1.6578 support intact, despite current retreat. Rise from 1.6127 should target 61.8% projection of 1.6127 to 1.6671 from 1.6450 at 1.6786. Firm break there will target 100% projection at 1.6994 next. Nevertheless, break of 1.6578 will mix up the near term outlook and bring deeper fall back towards 1.6450 support.

In the bigger picture, fall from 1.7062 medium term top is seen as a correction to the up trend from 1.4281 (2022 low). Break of 1.6844 resistance will argue that this up trend is ready to resume through 1.7062 high. In case of another fall, strong support should be seen around 1.5846 and 38.2% retracement of 1.4281 to 1.7062 at 1.6000 to bring rebound.

Daily Pivots: (S1) 0.9578; (P) 0.9598; (R1) 0.9611; More...

EUR/CHF is losing some upside momentum but intraday bias stays on the upside for now. Current rise from 0.9252 should target 161.8% projection of 0.9252 to 0.9471 from 0.9304 at 0.9658 next. On the downside, below 0.9553 minor support will turn intraday bias neutral and bring consolidations first, before staging another rise.

In the bigger picture, as long as 0.9683 resistance holds, rebound from 0.9252 are seen as a corrective move only. Larger down trend is expected to resume through 0.9252 after the correction completes. However, firm break of 0.9683 and sustained trading above 55 W EMA (now at 0.9622) will argue that 0.9252 is already a medium term bottom. Stronger rise would then be seen 61.8% retracement of 1.0095 to 0.9252 at 0.9773 and above.

• EURUSD remains above downtrend line
• RSI and MACD look weak

EURUSD has been developing within a narrow range of the 20- and the 50-day simple moving averages (SMAs) of 1.0805 to 1.0860 respectively. The pair is still standing above the short-term downtrend line and the 200-day SMA, confirming the broader bullish outlook.

Technically, the RSI indicator is pointing slightly up above the neutral threshold of 50; however, the MACD oscillator is weakening its momentum above its trigger and zero lines.

If prices overcome the 50-day SMA and the immediate resistance of 1.0890 then it may open the way towards the 1.0930 resistance ahead of the 1.1000 round number, taken from the high on January 24.

On the flip side, it there is a potential decline below the 200-day SMA and the critical level of 1.0795 then the market may dive towards the medium-term supportive trend line at 1.0750. A successful break lower could retest the 1.0695 barricade ahead of 1.0655, switching the outlook to negative.

All in all, EURUSD is looking neutral to bullish in the short-term and bullish in the medium-term timeframes, but a climb above 1.0890 is expected to endorse the positive outlook.  

Daily Pivots: (S1) 1.3564; (P) 1.3584; (R1) 1.3613; More...

Intraday bias in USD/CAD remains neutral as consolidation continues below 1.3605. Further rally is expected as long as 1.3439 support holds. Break of 1.3605 will resume the rise from 1.3176 and target 100% projection of 1.3176 to 1.3540 from 1.3357 at 1.3721 next.

In the bigger picture, price actions from 1.3976 (2022 high) are viewed as a corrective pattern only. In case of another fall, strong support should emerge above 1.2947 resistance turned support to bring rebound. Overall, larger up trend from 1.2005 (2021 low) is still expected to resume through 1.3976 at a later stage.