German industrial production is showing some tentative signs of recovery, the month over month figure for February was reported today at +0.5%, an improvement over January’s -0.6%, which was revised down by Germany’s ministry of finance today from the 0.0% figure traders were greeted with on their economic calendars this morning.
The year on year figures were more conservative but at -1.8% they still showed gains over last year’s -2.6% figures.
Nevertheless the more stable two month comparison demonstrated that industrial production in Germany actually fell in January to February as contrasted with the figures from November to December. Also three month comparisons reveal no change. With such contradictory data at their disposal euro-traders were not as bullish as may have been expected in the wake of the generally positive economic data from Germany’s mining and manufacturing sector.
In the immediate aftermath of the data hitting the world’s press the EUR/USD currency pair actually traded down, dropping from 1.30173 to 1.30033 in little over five minutes. Generally however EUR/USD has been in an upward trend since early this morning, it has gone from today’s low point of 1.29684 to its daily high point at the time of writing at 1.30376, and is currently trading at 1.30241.
The main concern from Germany is that as business surveys continue to come in negative, indicating a reduced demand for products and raw materials, this could mean a further slowing of Germany’s economy which has recently been showing some signs of a tentative recovery. The best it can hope for, some analysts have suggested, is a prolonged sideways movement. The silver lining in this scenario is that a strong labour force and rising wages could stimulate domestic demand for the very products that Germany is finding it harder to shift overseas.
As ever Germany’s Finance Ministry remains upbeat, stating that this year’s lacklustre start is little more than a blip that should correct itself over the coming quarter. This is tied in to a general optimism regarding the global economic state of play which is no-doubt fostered due to Germany’s privileged place in Europe and relative health in comparison to the rest of the euro-zone’s more heavily crisis-stricken nations.
All in all not the most obviously successful economic indicator for binary traders, especially on the EUR/USD currency pair. The immediate downturn following today’s economic report will have wiped out many an otherwise well placed Call trade. Regardless of this the general uptrend this was all taking place within, coupled with the many reversals that took place throughout the trading day, made for a number of very attractive applications of binary options reversal as well as hedging strategies. The volatility of today’s EUR/USD market will have made many a more adventurous binary trader a small fortune trading on those constant reversals.
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.