Euro breaks marginal gains ahead of US CPI -by Ecork

EUR/USD analysis

  • German CPI – ACT: 7.4%, EST: 7.4%
  • European Central Bank officials support rate hike after APP.
  • Opposite growth in the form of a Russian oil embargo.

Basic Euro Backup

Earlier this morning, German economic inflation The data (see economic calendar below) for April has been printed in line with expectations in 7.4% Hence continuing its upward trend for 2022. German data often serves as a barometer for the EU region leaving European Central Bank Comments scheduled for later today are open for further extremist Ringtone, ring. EUR / USD It reacted positively with slight gains however, market participants remain apprehensive as we approach the release of the US CPI.

EUR/USD economic calendar

source: DailyFX Economic Calendar

There has been a lot of talk about inflation in the US and it has peaked with expectations (6%And 8.1%) lower than the previous data, which was manifested in market prices by the decline in US 10-year Treasury yields below 3% And a little weaker dollar. The Russian oil embargo should not be forgotten in the medium and long term because the negative impact on growth in the European Union may constrain the gains of the Euro even if inflation in the United States begins to decline.

From an EU perspective, ECB officials including Villeroy, Mueller, Elderson and Nagel commented this morning that rate normalization should begin this summer soon after the APP ends.

Technical Analysis

EUR/USD daily chart

EURUSD daily chart

The graph was prepared by Warren VenkitasAnd IG

The daily EUR/USD chart hasn’t changed much since my last update with the US CPI likely providing the much needed catalyst for price movement out of its consolidation movement. Confined between the swing low in April at 1.0471 And 1.0600Inflation reading in line or below expectations may push EUR bulls into action and breakout 1.0600 resistance area.

The current levels historically (2015 and 2016) have been a major inflection point, but the big drop in prices on the EUR/USD pair shows what could be the end of a mature move down before some sort of corrective play up. Don’t mistake this as a complete reversal as I’m still pro-dollar but in the short term there is a great opportunity for the upside to fix.

Resistance levels:

  • 1.0806
  • 20 day EMA (purple)
  • 1.0600

Support levels:

IG customer sense data: mixed

IGCS shows offline retailers Long employment EUR / USDWith 74% of traders who are currently holding long positions (as of this writing). At DailyFX we usually take a contradictory view of crowd sentiment, however, given the recent changes in long and short positions, we prefer short term indecision.

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