Previous week in the US was all about inflation data. Markets are closely watching its development in a quest to predict the next Fed`s move. Although official figures are showing that inflation is evidently slowing down, still markets and the Fed have a different view on a potential next move when interest rates are in question. As markets are now betting that the Fed is done with further rate hikes, several Fed officials have recently stressed that rate cuts are not on the table while any inflation swing to the upside might trigger another rate increase. Officially published inflation rate stands at 3.2% in October on a yearly basis, and was a bit better from market expectation of 3.3%. At the same time, core inflation remained elevated at level of 4%, but still better from market forecast at 4.1%. Producer Prices Index for October was down by -0.5% compared to the previous month, absolutely beating market estimates of 0.1%. Retail Sales for October were also better from market estimate, at -0.1% on a monthly basis, from -0.3% projected by market. Other published indicators show that Building Permits preliminary for October were 1.487M, a bit better from forecasted 1.45M.
Data published for the Euro Area showed a revised estimate for Q3 GDP growth at -0.1% compared to the previous quarter, which was in line with market estimates. GDP growth on a yearly basis for Q3 stands at 0.1%, revised from 0.5% as a first estimate. The ZEW Economic Sentiment Index for November stands at 13.8, significantly better from the market estimate of 6.1. The same indicator for Germany for November is at level of -79.8, missing market forecast at -76.9. Inflation rate in the Euro Area was 0.1% in October, or 2.9% on a yearly basis, as final figures show. Core inflation was standing at 4.2% on a yearly basis, revised from 4.5% posted previously.
The USD lost in strength during the previous week after inflation figures. The eurusd started the week around level of 1.067 support line and pushed the price toward the 1.08 resistance. Still, the market had strength to push the price further above the resistance line, so the currency pair is ending the week at level 1.0916. The next resistance line, which stands at 1.10 has not been tested on this occasion. The RSI reached its overbought side, indicating potential short reversal in the coming period. Moving average of 50 days is still modestly diverging from MA200 counterpart, not providing an indication over the potential cross in the coming period.
After the market managed to clearly break the 1.08 resistance line, it opened a path toward the next resistance at 1.10. The market ended the week at level of 1.0916, half way from both support and resistance lines. There is some probability for the currency pair to test 1.08 support line in the week ahead, and lower probability for a move toward 1.06 support for one more time. Still, it should be noted that the market is currently setting the stage for the 1.10 resistance line, which is the next target of eurusd.
Important news to watch during the week ahead are:
Euro: HCOB Manufacturing PMI Flash for November for Germany, GDP Growth Rate final for Q3 for Germany, Ifo Business Climate for November for Germany
USD: FOMC Minutes, Durable Goods Orders for October, Michigan Consumer Sentiment Final for November
Data published for the Euro Area showed a revised estimate for Q3 GDP growth at -0.1% compared to the previous quarter, which was in line with market estimates. GDP growth on a yearly basis for Q3 stands at 0.1%, revised from 0.5% as a first estimate. The ZEW Economic Sentiment Index for November stands at 13.8, significantly better from the market estimate of 6.1. The same indicator for Germany for November is at level of -79.8, missing market forecast at -76.9. Inflation rate in the Euro Area was 0.1% in October, or 2.9% on a yearly basis, as final figures show. Core inflation was standing at 4.2% on a yearly basis, revised from 4.5% posted previously.
The USD lost in strength during the previous week after inflation figures. The eurusd started the week around level of 1.067 support line and pushed the price toward the 1.08 resistance. Still, the market had strength to push the price further above the resistance line, so the currency pair is ending the week at level 1.0916. The next resistance line, which stands at 1.10 has not been tested on this occasion. The RSI reached its overbought side, indicating potential short reversal in the coming period. Moving average of 50 days is still modestly diverging from MA200 counterpart, not providing an indication over the potential cross in the coming period.
After the market managed to clearly break the 1.08 resistance line, it opened a path toward the next resistance at 1.10. The market ended the week at level of 1.0916, half way from both support and resistance lines. There is some probability for the currency pair to test 1.08 support line in the week ahead, and lower probability for a move toward 1.06 support for one more time. Still, it should be noted that the market is currently setting the stage for the 1.10 resistance line, which is the next target of eurusd.
Important news to watch during the week ahead are:
Euro: HCOB Manufacturing PMI Flash for November for Germany, GDP Growth Rate final for Q3 for Germany, Ifo Business Climate for November for Germany
USD: FOMC Minutes, Durable Goods Orders for October, Michigan Consumer Sentiment Final for November
