Forecast: Recovery? Not so fast, upbeat German data is insufficient to beat the bears

EUR/USD Forecast: Recovery? Not so fast, upbeat German data is insufficient to beat the bear
EUR/USD has been recovering after German PMIs beat expectations.
Echoes from the ECB's meeting and coronavirus headlines are set to rock markets.
Friday's four-hour chart is pointing to oversold conditions.
Is Europe out of the woods? German Purchasing Managers' Indexes provide hope – but the continent's locomotive and the euro still have some way to go.
Markit's preliminary German Manufacturing PMI beat expectations with 45.2 points – yet still below the 50-point threshold that separates expansion from contraction. The Services PMI also exceeded estimates with 54.2 points, reflecting more significant growth.
Overall, the picture is encouraging – the slump in manufacturing has not dragged the whole economy down, and now both are recovering.
France, the continent's second-largest economy had more mixed results – the Services PMI missed with 51.7 and manufacturing beat ith 51 points. The figures reflect modest and balanced growth.
ECB decision, coronavirus, Italy's elections
These statistics have been released less than 24 hours after the European Central Bank conveyed a cautious message about the recent green shoots. Christine Lagarde, President of the ECB, announced the launch of a strategic review, which she aims to conclude by year-end. The former Managing Director of the International Monetary Fund wore an owl pin – echoing her words of aiming to be wise likely the nightly bird, rather than being a hawk or a dove.
Apart from being unenthusiastic about the recent rise in business surveys and inflation, Lagarde said that the climate crisis is also a consideration – potentially opening the door to more money printing. The ECB continues buying €20 billion euros of bonds every month.
Lagarde also mentioned protectionism as a downside risk, and tensions between the EU and the US remain intact. In a speech in Davos earlier this week, President Donald Trump repeated his threat to slap tariffs on the bloc. Deliberations in the World Economic Forum conclude today and they include a panel featuring Lagarde and US Treasury Secretary Steven Mnuchin.
The coronavirus outbreak in China and elsewhere continue gripping markets. The world's second-largest economy shut down transport links to Wuhan – where the diseases originated –and other cities in the region. Several Chinese cities canceled their New Year's celebrations