EU industrial production and German GDP exhibit strength, but Euro declines

EU industrial production accelerates as German GDP breaks two-year contraction

According to data from Eurostat, year-on-year industrial production accelerated from 1.7% in October to 2.5% in November, outperforming analysts’ expectations of a 2% increase. This updated figure represents the highest level since October 2022, signaling a recovery in an industrial sector that had faced significant deterioration in recent years.

In tandem, data from the Federal Statistical Office of Germany indicates that the full-year GDP growth rate reached 0.2% in 2025. This result concludes two consecutive years of economic contraction. Collectively, the industrial production figures and German GDP growth provide a more optimistic outlook for a European economy that has recently struggled with sluggish growth.

Regarding the market reaction, the euro depreciated by 0.32% to $1.1606 against the US dollar. Although the economic indicators imply a potential recovery in production and consumption, the prevailing strength of the dollar continues to exert downward pressure on the European currency.

Figure 1. Germany full year GDP growth (2016-2025). Source: Data from the Federal Statistical Office; Figure obtained from Trading Economics.

Technical analysis of the EUR/USD pair

From a technical perspective, the EUR/USD pair remains within a broader bullish trend; however, in the short term, price action is forming a consolidation structure. Key observations include:

• Trend Context: In the long term, the EUR/USD pair has maintained a bullish structure characterized by higher highs and higher lows. Nevertheless, in the short term, the euro is trading within a consolidation range between $1.1470 and $1.1860.
• Resistance Levels: Should the short-term resistance at $1.1860 be breached to the upside, the next significant ceiling is the $1.2270 level—a long-term structural resistance. A decisive break above this zone would suggest potential for an extension toward higher price targets.
• Support Levels: If short-term support at $1.1470 is compromised, the next relevant floor is located at $1.1230 (a structural pivot point). A breach of the $1.1230 zone would increase the probability of a deeper market correction.
• Momentum Indicators: The MACD is currently crossing the zero line, suggesting a nascent bearish trend that could gain momentum. Additionally, the RSI oscillator exhibits a downward slope, indicating that bearish momentum is strengthening in the short term.

Figure 2. EUR/USD pair (2024-2025). Source: Data from the Intercontinental Exchange (ICE); own analysis conducted via TradingView.