German Prelim CPI Overview
Thursday’s Eurozone economic docket highlights the release of Harmonized German prelim CPI data, scheduled for release later during the mid-European session at 1300 GMT. Softer regional CPIs released earlier this Thursday point to a bleak picture of the harmonized German CPI readings. The headline CPI is expected to fall 0.6% MoM in January, while the yearly rate is seen ticking higher to 1.7% from 1.5% previous.
In Hesse, MoM inflation for November arrived at -0.7%, versus +0.5% previous. In Bavaria, the January inflation came in at -0.8% MoM versus +0.5% prior. Also in Brandenburg, January inflation edged lower to -0.6% MoM versus the previous month’s reading of +0.6%. Saxony January CPI arrived at -0.7% MoM versus +0.6% last.
How could it affect EUR/USD?
NDDFX’s Analyst Yohay Elam offered a brief technical view for the EUR/USD pair and explained: “Euro/dollar remains on the back foot after falling below the uptrend support line, and the recent stabilization fails to alleviate the pressure. The currency pair is trading below the 50, 100, and 200 Simple Moving Averages on the four-hour chart. Moreover, momentum remains to the downside.”
Yohay also provided key technical levels for trading the major on the CPI release: “Support awaits at 1.0990, which is the fresh 2020 low. It is closely followed by 1.0980, the December trough, and then by 1.0940, a swing low from October. 1.0879 is next.”
“Resistance awaits at 1.1030, a high point earlier this week, and then by 1.1070, which provided support earlier in January. Next, we find 1.1110, swing high, and then 1.1125, which played a role in both directions,” he added further.
EUR/USD Analysis: Resilient below 1.10 mark, focus shifts to German CPI/US GDP
EUR/USD Forecast: Coronavirus and US GDP could trigger next lower after the Fed breather
EUR/USD under pressure near 1.10 ahead of German data
About the German Prelim CPI
The Germany consumer price index released by the Statistisches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends. A high reading is positive (or Bullish) for the EUR, while a low reading is negative (or bearish).