Technical Analysis

Euro Yawns As Eurozone Inflation Rises

    0
    Share on Facebook Share on Twitter


    The euro continues to have a calm week. In the North American session, shows little movement as it trades a whisker above the parity line.

    Eurozone Inflation Tops 9%

    in the eurozone continues to move higher. In August, CPI rose to 9.1%, up from the July gain of 8.9%, which was a record high. climbed to 4.3%, up from 4.0%.

    With the headline and core readings exceeding the forecast of 9.0% and 4.1%, there will be additional pressure on the ECB to tighten policy more at an accelerated pace. The central bank has been slow to shift its accommodative policy, which was in place for years to support the eurozone economy.

    The ECB now finds itself playing catch-up with inflation and is also far behind in the tightening cycle compared to other major central banks, with a benchmark rate of just 0.50%. Inflationary pressures remain broad-based, which means inflation is well-supported and unlikely to decline anytime soon.

    The eurozone inflation report comes just a day after Germany, the largest economy in the bloc, reported that jumped to 7.9%, up from 7.5% in July and nudging above the forecast of 7.8%. The central bank meets next on Sept. 8, and there is a strong possibility that the ECB could come out with guns blazing and deliver a super-size 75 basis point increase.

    A potential energy crisis in Europe continues to hover like a dark cloud, and the uncertainty over whether Moscow will weaponize energy exports remains a massive concern. The Nord Stream 1 pipeline has been shuttered for scheduled three-day maintenance, but there are fears that Russia will find some excuse and not renew gas flows on Saturday.

    Any disruptions would likely push European gas prices even higher. In the meantime, the waiting game is on, with Western Europe on edge while it anxiously waits for the gas taps to be turned back on.

    EUR/USD Technical View

    EUR/USD has support at 0.9985 and 0.9880
    1.0068 is a weak resistance line, followed by 1.0173

    Disclaimer: This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors, not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers, or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.



    Originally Published Here -Source link

    0 0 votes
    Article Rating

    Express, Snap, Rocket Lab and more

    Previous article

    Dollar Index Gains After Powell Signals Commitment to Higher Rates By Investing.com

    Next article

    You may also like

    Subscribe
    Notify of
    guest
    0 Comments
    Inline Feedbacks
    View all comments