EUR/USD: Eurozone CPI and Levels

EUR/USD: Eurozone CPI and Levels

November 7, 2018 Off By admin-445

The end of October 2018 was marked by a steady decline of EUR/USD, after the pair posted losses during the previous two sessions. The downside target for the current week is 1.1300, and the experts predict some selling pressure.

On October, the annual inflation in Eurozone was 2.2%. At the same time, the Core CPI Flash Estimate for this market edged up to 1.1%, which is not much, but still noticeable. The level of unemployment here remained the same – about 8.1%.

Outcomes of  Value Decline

Being the world’s most popular and influential currency pair, it represents the greatest economies on our Planet. Therefore, the decline in its price can’t but have a serious impact on the rest countries. Let us consider the most important aspects of this influence:

  • Since the beginning of October, traders remain net-long. According to the statistics, 60.3% of them adhere to this strategy of dealing, as the prices remain low during the whole month.
  • Germany, the standard-bearer for the Euro sector, keeps its retail sales at almost the same level, with a slight gain of 0.1%. At the same time, the country’s Chancellor, Angela Merkel, has made an attempt to wind up her political career and improve the position of the European currency all at the same time. As we can see, both the attempts failed.
  • The representatives of Italy, in their turn, proposed to follow the economic plans of Donald Trump, which seems to be the best way out. This has seriously worried investors and the Italian gross domestic product proved to be 0% for the 3rd quarter of the year.
  • The majority of central banks prefer to see inflation within the target band of 2-3%, so the market of EUR is still at the lower end of this range. Thus, it’s too early to talk about the crisis, but traders should still be ready to such an outcome.

Tips for Dealers in the Current Circumstances

Taking into account the actual Eurozone CPI and the level of EUR/USD pair, experts advise not to hurry with your transactions. The thing is that the whole financial world is waiting for Italy or the European Union to capitulate first by November 13th, as one of them will surely lose the opportunity to sustain the competition.

Traders should also keep in mind that the level of Euro is still within historically limits as compared to many other currencies, resulting from the anticipation that by 2019 the European Central Bank will increase its interest rates. Besides, this year, the ECB is planning to finish its Quantitative Easing program, which will also influence the currency price.