German manufacturing orders jumped 5.2% m/m December, much more than the 0.6% anticipated. November was revised down to -3.6% y/y from -2.5% y/y reported initially, but this was still a very strong end to the year for German orders, which rose a staggering 4.3% q/q in the fourth quarter of 2016. This points to very robust manufacturing growth in the first quarter of 2017. The sharp rebound was mainly driven by a 6.7% m/m jump in domestic orders growth, and the numbers will add to pressure on Draghi to rethink his very accommodative monetary policy as growth continues to strengthen while inflation jumps higher.
EURUSD has been drifting lower throughout the Asian session and these figures added to the move lower. On the 1 hour chart the 20 and 50 period moving averages have been breached and broken in the last hour and next support is the 200 moving average at 1.0742, which is also the 50 period moving average in the 4 hour time frame. The RSI at 38 is weak and falling and the short term MACD has crossed the 0 line suggesting further weakness.
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