German trade surplus rose slightly in October, with imports falling at a sharper rate than exports partly due to a weaker Euro. Overseas shipments dropped a seasonally adjusted 0.5% to 97.2 billion euros in the month under review, while imports declined 3.1% to 76.6 billion euros, according to Destatis. This resulted in a trade surplus of 20.6 billion euros in the world's third biggest exporter. Trade with EU members saw a surplus of 59.7 billion euros, outside of the EU it stood at 44.2 billion euros. The Euro zone partners and the US have been calling for Germany to slash its trade surplus and spur consumer spending.
In the meantime, the European Commission has provided France, Italy and Belgium with extra three months to take additional budgetary measures to bring their deficits and debt levels down to conform with the EU rules. After weeks of negotiations the European Union lawmakers and the EU's 28 member countries have agreed on a preliminary 2015 budget deal, on condition that the European Commission prepares a plan to pay off more than €20 billion of unpaid bills. The deal, reached on Tuesday morning, averts the necessity for the EU to enter 2015 on emergency funding levels. Thus, the EU bloc is allowed to spend 141.2 billion euros ($179 billion) next year.
All eyes turn to ECB as it is due to announce second TLTRO results
Among the whole bunch of statistical data, which will be released the next trading day, markets will pay the most attention to the results of the second round of European Central Bank's targeted LTRO program, under which the regulator lends extremely cheap funds to banks in the Eurozone. However, besides that the German inflation data will be published on Thursday, along with American retail sales, which both are likely to have a significant impact on the performance of the Euro.EUR/USD set for decline after confirmation of triangle pattern
The long-term outlook for the EUR/USD remains bearish, as the cross has been moving downwards since the beginning of July and on December 3 has eventually breached the triangle pattern to the south. Moreover, it has reached a new 2014 low at 1.2246. Any negative impetus will push the cross down below this important level, with a long-term goal at 1.2098 (monthly S3). At the same time, right now the pair is also limited by the long-term downtrend line around 1.2420 from the upside.Daily chart
Taking into account the day-on-day development of the pair, the EUR/USD surged considerably on Tuesday, as the pair gained more than 100 pips and crossed the long-term downtrend. The cross was able to reach the weekly R1 around 1.2450, but returned back to close the day just below 1.2380. However, at the moment both daily and weekly indicators are assuming to cross will decline soon.
Hourly chart