Eurozone CPI – In line with expectations

EURUSD, Daily  

Eurozone March HICP inflation: -0.1% y/y. This was in line with median expectations and up from -0.2% y/y in the previous month. We had been looking for a slightly higher number after yesterday’s 0.3% point jump in the German HICP rate but national data from France and Spain earlier already suggested that steady rates elsewhere would prevent a more pronounced uptick in the overall number. Indeed Italian HICP, published at the same time as the EMU number, actually showed the headline rate falling even further into negative territory. The gap between Eurozone countries is widening again, which is not making the ECB’s task any easier. With the headline rate stuck in negative territory, markets will likely continue to speculate about Draghi’s next steps, although the fact that core inflation actually rose to 1.0% y/y from 0.8% y/y in February highlights that energy prices, where were down 8.7% y/y in March, remain the main driving factor behind the negative rate.

The dollar extended Yellen-inspired declines against the euro, which was the chief benefactor of the dynamic, while ebbing back toward lows versus other currencies. This put EUR-USD at a 1.1383 peak after breaching the February high, trading at levels last seen in October.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

 EURUSD-German Inflation Ticks Up

 

EURUSD, daily

The German HICP – Harmonised Index of Consumer Prices – (used for European purposes and different to German CPI figures) inflation rose to 0.1% y/y in March. This was more than expected and lifted the headline rate back into positive territory, after the -0.1% y/y rate in February. Belgian numbers, released earlier also moved higher and the data is likely to set the stage for a rebound in the overall Eurozone headline rate this month, with base effects playing a role. For now this should at least limit speculation about further action from Draghi and the use of helicopter money, especially after Coeure suggested that the latter is an interesting academic option and favourite of the press, but not actively considered as a policy tool at the moment.

The EURUSD remains north of the psychological 1.1300 at 1.1315 today with the month high 1.1346 providing resistance further out. Support is provided by the the 10 and 20 Day Moving Averages at 1.1236 and 1.1154 respectively.

Always trade with strict risk management and remember that your capital is the single most important financial aspect of your trading business.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

EURUSD, Daily

Earlier today Eurozone M3 money supply came in unchanged at 5.0%, as expected in February data. Amid the components, private sector credit showed a 3.2% y/y increase, up from 2.6% y/y growth in the previous month. This moving in the right direction, though below where ECB policymakers would like. Money supply has long since been demoted in the metrics the ECB uses in formulating policy decisions.

Over the last week EURUSD traded lower from the weekly Bollinger Bands after it had rallied for three weeks in a row. Stochastics oscillator is near overbought levels in the weekly picture. The EURUSD pair has created higher lows and higher highs in the daily timeframe and looked like it was building upside momentum. However, the latest high is lower than February 2^nd high and suggests the pair could correct lower towards the weekly 30 and 50 period SMAs. This would bring the pair near a rising channel low and the lower daily Bollinger Bands.

I am therefore looking for buy signals between 1.0915 and 1.0990 with Target 1 at 1.1134 – 1.1220 area and Target 2 1.1288 – 1.1360. Please, remember to apply the entry and risk management principles I’m teaching in the webinars. Join me to free webinars if you want to learn more.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

EURUSD, 240 min

German HICP was confirmed at -0.2% y/y in final February data, as expected and down from +0.4% y/y in January. The data hasn’t and won’t have market impact, although endorsing the ECB’s anti-deflationary bazooka of stimulus measures yesterday. Oil prices, which reached a 12-year low in January, have been driving inflation down.

EURUSD rallied too far too fast and became overbought. Now this extreme condition has been unwinding and the pair looks like a sell. In my view a more ideal level to short this market would be my Sell Area between 1.1148 and 1.1185 but the price action seems to indicate that the pair could turn lower from levels near 1.1040. This level is a more aggressive entry option while those preferring to wait for a more conservative entry might prefer to wait for a further move into the Sell Area. In either case we consider short trades only if price action confirms the trade idea. Target: at 1.1050-1.1075.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

EURUSD, 240

EURUSD is in a correction phase after topping and rolling over just above 1.1300. Today the pair has been edging lower near the lower 4h Bollinger bands and has failed to rally above 23.6% Fibonacci level. The lower highs and lower lows suggest that this market is weak even though it is trading at lower Bollinger bands. Dollar index looks like it is trying to break higher which confirms the bearish short term view for EURUSD. The 30 period SMA is about to cross below the 50 period SMA while oscillators are moving sideways near oversold levels.

EURUSD, 60 min

Price is creating lower highs and lower lows while faster moving average (30 period) is below the slower (50 period) and point lower. However, the Stochastics oscillator indicates oversold conditions together with the price being at lower Bollinger bands.

Conclusion:

As the pair is correcting lower after hitting resistance at 1.1300 plus levels and the price is making lower highs and lower lows the indications are bearish. Industrial Production numbers are out in a few minutes and might provide some volatility that we could use to sell the market. Provided the volatility isn’t too excessive. Should the price rally inside my sell area between 1.1150 and 1.1180 and provide us with sell signals there we are looking to engage the short side with a view of covering the shorts at target areas.  Target 1: 1.1040-1.1085 and Target 2: 1.0965-1.1010.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.