Stagflation Recurs With Contracting EZ GDP & Record Core CPI


EUR/USD ANALYSIS TALKING POINTS

  • Eurozone core inflation surprises higher at 5%.
  • EZ GDP echoes dire economic situation in the region.

Trade Smarter – Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

EURO FUNDAMENTAL BACKDROP

Recent eurozone data has added further complications for the ECB particularly concerning inflation. Core inflation beat estimates (see economic calendar below) hitting the 5% mark, following on from last week’s German inflation print.

Recommended by Warren Venketas

Get Your Free EUR Forecast

EUROZONE ECONOMIC CALENDAR

Source: DailyFX economic calendar

While the December ECB interest rate decision looks to be skewed towards a 50bps hike, rising inflation primarily driven by energy prices which filter down to the core figure make it difficult for the ECB not to consider something more substantial. The opposing argument stems from global recessionary fears, the ongoing energy crisis as well as lesser stimulus making an aggressive monetary policy potential fatal for eurozone consumers. Today’s GDP statistic is reflective of this as both GDP QoQ and YoY show significant declines.

TECHNICAL ANALYSIS

EUR/USD DAILY CHART

image2.png

Chart prepared by Warren Venketas, IG

EUR/USD price action showed minimal reaction to the news as markets mull over contrasting viewpoints as outlined above. With greater headwinds facing the region, as well as the inability of euro bulls to maintain prices above parity last week, I favor a downside bias for the pair towards subsequent support zones.

Resistance levels:

  • 1.0064 (76.4 Fibonacci)
  • 100-day EMA (yellow)
  • 1.0000

Support levels:

  • 50-day EMA (blue)
  • 20-day EMA (purple)
  • 0.9864

IG CLIENT SENTIMENT DATA: MIXED

IGCS shows retail traders are currently LONG on EUR/USD, with 53% of traders currently holding long positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment however, due to recent changes in long and short positioning, we arrive at a short-term cautious disposition.

Contact and followWarrenon Twitter:@WVenketas





Source link

Related articles

FX possibility expiries for 1 Could 10am New York lower

There are a pair to pay attention to on the day, as highlighted in daring.The primary ones are for EUR/USD, layered in between 1.1250 by to 1.1330. The expiries do not tie in...

El Salvador Dedicated to Shopping for Bitcoin Regardless of IMF Deal, Minister Says

El Salvador is quietly defying the IMF, accelerating every day bitcoin buys and reinforcing its daring crypto technique on the worldwide stage. El Salvador Retains Shopping for Bitcoin Each day Regardless of IMF...

One of the best safe browsers for privateness in 2025: Knowledgeable examined

Courageous is a Chromium-based browser that blocks adverts, fingerprinting, and ad-trackers by default. Courageous has thousands and thousands of customers worldwide. The corporate's enterprise mannequin depends on privacy-protecting adverts that pay publishers...

Stablecoins on monitor for $2T market cap by 2028 — US Treasury

US Greenback-pegged stablecoins are on monitor to succeed in an mixture market capitalization of roughly $2 trillion by 2028, in line with the USA Division of the Treasury’s Q1 2025 report. Stablecoins’ cumulative...
spot_img

Latest articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

WP2Social Auto Publish Powered By : XYZScripts.com