EUR: Eurozone inflation data may push euro even lower

The euro continues to be under pressure amid weak fundamental data for the eurozone. The US dollar, on the contrary, enjoys demand in times of uncertainty, since the prospects are clearer. Most likely, the US Federal Reserve will continue to raise interest rates on the background of good macroeconomic statistics, which has recently delighted traders.

According to the data, the indicator of confidence of American consumers in October of this year has once again grown and reached a maximum level in two decades. Consumers continue to expect that strong growth in the economy will continue, as will the creation of new jobs.

According to the report of the Conference Board, the consumer confidence index in October 2018 rose to 137.9 points, while economists had expected the index to be 136 points in October. The Conference Board noted that strong employment growth has a positive effect on consumers' assessment of current conditions.


The annual growth rate of housing prices in the US slowed down a bit in August, which may temporarily allow you to avoid overheating in the real estate market. According to the data, prices for the current year fell below 6%. Lower prices indicate a slowdown in the real estate market, which is likely to continue.

According to the report, the national house price index in August rose by 5.8% compared with the same period of the previous year, after rising by 6% in July. The rise in prices is gradually slowing down due to falling demand, which was largely affected by the increase in US interest rates this year.

Important Inflation Data in the Eurozone

Today, it is necessary to pay attention to the report on inflation in the euro area, which could push the European currency even lower. Economists expect the CPI to rise by 2.2% in October this year, after rising 2.1% in September. An increase in core inflation is expected to be at 1.1%. If the data turns out to be worse than economists' forecasts, this may affect the plans of the European Central Bank, which may reconsider its attitude towards the future of monetary policy.


A report was released yesterday in Germany, where consumer prices in October grew faster than expected. According to the Federal Statistics Bureau Destatis, the CPI of Germany in October 2018 rose by 0.2% compared with the previous month and by 2.5% compared with the same period of the previous year. Economists had forecast that prices would rise by 0.1%, and 2.4%, respectively. Annual growth rates in Germany in October reached a level of 2.8%.

Inflation, calculated according to EU standards, showed an increase of 0.1% compared with the previous month and 2.4% compared with the same period of the previous year, while economists had expected a monthly increase in the harmonized index of 0.1%.

As for the technical picture of the EUR / USD currency pair, the prospects for the upward correction are rather vague. Most likely, the bears will continue to crush the euro until Thursday, playing a rapid fall at the beginning of the new month. The breakthrough of support for 1.1335 will lead to a new wave of large sales with a minimum of 1.1300 and 1.1250. In the case of an upward correction in a trading instrument, large resistance levels will be traced in the range of 1.1370 and 1.1400.

The material has been provided by InstaForex Company -