EUR/USD Through $1.10 Shrugging Off Upbeat Inflation
Fiona Cincotta November 29, 2019 8:39 AM
EZ Inflation beats
Eurozone inflation was more encouraging beating expectations by climbing 1% higher year on year in October. Whilst this is still a good distance from the ECB’s 2% target it is a definite improvement on September’s 0.7% increase. Core inflation also surprised to the upside, increasing for the third straight month.
The question is whether this increase in inflation can be sustained or even increased? Core inflation is on the up and wage growth is also rising so increased pressure on prices is possible. That said, businesses are lacking the confidence to put higher costs onto the consumer in any meaningful way. As a result, inflation could struggle to advance. Given the weakness in the euro investors are dubious of inflation picking up further.
The increase in inflation is good news for the ECB, which is growing increasingly concerned over the impact of its lose monetary policy. Still policy makers will want to see more evidence of increasing inflation before they take their foot off the easing pedal.
Levels to watch:
The EUR/USD trades below its 200, 100 and 50 sma – bearish signs. The pair broke through support at $1.10 and $1.0989 opening the door to $1.0940. Resistance can be seen at $1.1020, $1.1050 and $1.11.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.