EUR/USD edges higher after German PPI
EUR/USD is rising, recouping losses from the previous session as USD bulls pause for breath.
Headline eurozone inflation rose to 9.9% YoY in September. This was below the 10% initially forecast but is sufficiently high to keep pressure on the ECB to raise interest rates by 75 basis points at next week’s meeting.
German PPI remained stubbornly high at 45.8% YoY in September, in line with August but above forecasts of 44.7%. PPI is considered a lead indicator for consumer prices, suggesting that consumer prices will continue to rise.
Meanwhile, the USD is broadly supported by the hawkish Federal Reserve, and safe haven flows as global recession fears rise.
Looking ahead, US jobless claims and several Fed speakers could lift the USD.
Where next for EUR/USD?
EUR/USD has formed a series of lower lows and lower since February. The pair ran into resistance this week at 0.9865 and is edging lower. The RSI is just below 50, which suggests that momentum supports the downside.
Sellers are looking for a break below support at 0.9750 the 20 sma and the multi-week falling trendline. A break below here opens the door to 0.9650, the October 13 low, and 0.9535, the 2022 low.
Buyers will rise above 0.9870 the weekly high, exposing the 50 sma at 0.9920 and 1.00 the October high.