German CPI Preview: What to Expect of EUR/USD?
The bid tone surrounding the EUR/USD pair
strengthened over the last hours as upbeat macro data from Germany and
Eurozone boosted the sentiment around the EUR. While continued broad
based US dollar selling backed by the BOJ fall-out, also helps keep the
major near weekly tops above 1.1350 levels.
Soft regional CPI readings point to a weaker nationwide print
Next
of note for main currency pair is the German inflation data due later
in the session, with markets expecting price pressure to ease to 0.2% on
a yearly basis in March, a slight slowdown from the 0.3% rate booked in
February. On monthly basis, the prices are seen dropping 0.1%, sharply
down from a 0.8% increase seen previously.
Germany's regional
CPIs released earlier today also paints a weaker picture of the
harmonized German CPI report, with Brandenburg inflation for the month
of April MoM coming in at -0.3% vs +0.9% prev, while the YY was -0.2% vs
0.0% prev. In Hesse, MoM stood at -0.2% vs +0.8% prev, with YoY at
-0.1% vs +0.15 prev. Meanwhile, in Bavaria, the MoM came at -0.1% vs
+0.8% prev, with YoY at +0.2% vs +0.3% prev.
However, the German
data is expected to have limited impact on the EUR/USD pair, as the
main risk event for the major this Thursday is expected to be the first
estimate of the US Q1 2016 GDP due shortly after the German CPI report.
EUR/USD Technical Levels
Valeria
Bednarik, Chief Analyst at FXStreet notes, “From a technical point of
view, the pair presents a mild positive tone, as the price is near its
weekly high of 1.1367 and above its moving averages, with the 20 SMA
heading sharply higher well below the current level in the 4 hours
chart. In the same time frame, the technical indicators hold in positive
territory, but lacking directional strength. The pair needs to
accelerate beyond the 1.1380 region to extend its gains today, with the
next short term resistances at 1.1420 and 1.1460.
A strong support is now in the 1.1310/20 region, with a break below it indicating a continued decline down to the 1.1270 region.”