The Eurozone economy has begun to recover at a slower pace.

The euro has weakened slightly to 0.92 euros per US dollar after strengthening earlier in the week, as investors reduce expectations for interest rate cuts by the European Central Bank (ECB) this year. Additionally, various economic indicators for the Eurozone are starting to show signs of slowing down, including exports and declining wage growth.

Wage growth slowed to 4.5% in the fourth quarter of 2023, down from a previous increase of 4.7% in the preceding quarter, partly due to the ECB's interest rate hike in the previous year. The ECB policymakers consider wage growth a key factor in deciding when to adjust interest rates, prompting investors to closely monitor wage growth in the first quarter of 2024.

Recently, ECB President Christine Lagarde commented on the labor market and wage growth, stating that "rapidly increasing wages will lead to higher prices for various goods, serving as an important driver of changes in inflation rates in subsequent quarters." However, ECB policymakers have not yet made any policy decisions until inflation returns to the target of 2%. There are also forecasts that inflation will decrease to 2.7% in 2024 from 3.2% and 2.2% in 2025, due to rapidly declining energy prices.

The balance of payments has rapidly increased to a surplus of 42.66 billion euros in December 2023 from 16.62 billion euros in the previous year, with the trade balance increasing by 36 billion euros from 10 billion euros, and the services balance increasing by 12.1 billion euros from 10 billion euros. However, despite the increase in the Eurozone's balance of payments, technical economic downturns in Germany may lead to a slowdown in trade or service balances this year.

The Eurozone recorded a trade surplus of 16.8 billion euros after a deficit of 8.5 billion euros in the previous year, mainly due to a rapid decrease in imports by more than 21% to 201.9 billion euros, primarily from Russia, the United Kingdom, Switzerland, and China.

Exports from the Eurozone decreased by 8.8% annually to 218.7 billion euros in December, primarily due to a rapid 25.4% decrease in fuel sales. Additionally, industrial goods exports continued to decline by 9.0%, with notable reductions from Russia, Norway, Switzerland, and Japan.

Techical analysis data (5H)

Resistance: 0.9246, 0.9255, 0.9262

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 0.9223 - 0.9231 but cannot break the support at 0.9231, you may set a TP at approximately 0.9255 and SL at around 0.9215 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 0.9246 - 0.9255, you may set a TP at approximately 0.9262 and SL at around 0.9223 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 0.9246 - 0.9255 but cannot break the resistance at 0.9246, you may set a TP at approximately 0.9223 and SL at around 0.9262 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 0.9223 - 0.9231, you may set a TP at approximately 0.9215 and SL at around 0.9255 or according to your acceptable risk.

Pivot point February 23, 2024 07:03 PM. GMT+7