Forex Signals Brief for Aug 27: Germany on the Brink of Recession
Rowan Crosby • 2 min read
Today we’ll get a very clear indication as to just how bad things are going in Germany.
Traders will be closely be watching German GDP, with the expectation that quarterly growth will fall to -0.1%. A recession is two periods of negative economic growth and the last time around we saw GDP come in at 0.4%. So this is the first domino to fall on what could be a looming German recession.
There have been some worrying signs lately across Europe including yesterday’s lacklustre business confidence reading in Germany, so don’t be surprised to see a very soft print here. Clearly the EUR/USD will be waiting on this number.
In early Asian trade we are again seeing some weakness in risk assets after yesterday’s bounce. President Trump appeared to be backing down on China to some degree and extended an olive branch, but as we know, this is a rapidly changing environment.
Later in the US we get consumer confidence which should make for interesting reading given what has been going on in the last month and the fear that is in the air.
Forex Signal Update
The FX Leaders Team finished with 2 wins from 6 signals to get the week started. GOLD was a busy trade to start the week and it looks like it is still in-play today.
GBP/USD – Pending Signal
The GBP/USD has pulled back as we expected it might, with the round numbers continuing to be important. We are still hunting a short signal here.
AUD/USD – Active Signal
The AUD/USD has been the leading risk trade in terms of the forex market recently and it looks like it is making another move to the downside here today. We are currently short, with plenty of protection at 0.6800.
Volatility in BTC continues to contract at the moment and it is now at its lowest level in more than 2 months.
The $10,000 level appears to be the line in the sand at the moment and as we know, when volatility contracts it generally leads to big moves in price.
At this point, I am not going to be surprised if we break up or down, but the technicals suggest we are looking at a leg lower.
However, I am prepared to go with the break of this range and will be firstly looking at $10,000 as the key for the time being.