EUR/USD is still trading near 1.1560. Market participants are adjusting to the latest Eurozone inflation data and yesterday’s mixed retail sales report from Germany. The euro has survived under test on the backs of some wavering positive economic indicators. Support levels and psychological round numbers are the ones calling the shots when it comes to its recent trends.
The Eurozone’s core Harmonized Index of Consumer Prices (HICP) increased consistently by 2.4% over the same time span. This growth beat expectations, which had been for 2.3% growth. This jump marks a radical departure from last year’s annual core inflation rate of 2.4%. For now, researchers predict it will fall a bit to 2.3%. HICP excluding energy and unprocessed food surged by 0.2% this month. At the same time, all-important core inflation jumped 0.3%, the largest monthly gain in consumer prices in the past year.
Current Trading Landscape for EUR/USD
Currently, the trading value of EUR/USD at around 1.1560 indicates a looming risk off sentiment among the market. The EUR/USD has an influential support level that’s immediate and comes in at 1.1542. This level has the potential to be an important breaking point if the downward pressure continues. If the duo were to fall under this support barrier, it might be able to retest its four-month low of 1.1391.
Traders are eyeing the 1.1600 psychological mark. This third tier acts as an invisible but important next line of defense that keeps the central tendency in flux. The nine-day Exponential Moving Average (EMA) is currently at 1.1605 which gives traders further information when looking at short-term trends.
Economic Indicators and Their Impacts
The underlying HICP growth numbers are encouraging. Yet, mixed macro data from German retail sales haven’t made a large impact on the EUR/USD exchange rate recently. Retail sales from Germany beat expectations, rising by 0.2% this month. The year-over-year rate of growth dropped to a mere 0.2% in September. This deceleration could be indicative of general macroeconomic difficulties across the Eurozone, leading traders to adopt a risk-averse attitude.
In September, Eurozone monthly inflation rates and core inflation were at only 0.1%! Yet this figure serves as a frustrating reminder of persistent economic insecurity. In addition, the Relative Strength Index (RSI) for EUR/USD is still under 50, reflective of a bearish market sentiment.
Future Outlook for Eurozone Inflation
A cautious Fed and macro nervousness
Industry analysts will be watching closely as the economic data emerges. These data should help uncover further influences on Eurozone inflation and impact on the EUR/USD exchange rate. The recent growth in core HICP is a positive sign, yet the anticipated decrease in annual core inflation raises questions about future consumer spending and overall economic health.