Inflation in the United States accelerated from 1.4% to 1.7%, which was slightly more than the expected 1.6%. Although this is not strange, this somewhat alarmed market participants. Investors suddenly feared that the United States could repeat the European scenario, when consumer demand collapsed sharply after inflation replaced deflation. The reaction is frankly strange, since inflation in the United States is clearly not accelerating at such a rapid pace as in Europe. It is much slower. So, it is not quite correct to compare the inflationary dynamics in Europe and the United States. On the contrary, the steady increase in inflation in the United States indicates a high probability of tightening the monetary policy of the Federal Reserve System. Nevertheless, these fears were the reason why we did not see further growth of the dollar. It is worth paying attention to the fact that the growth of the euro was purely symbolic. In other words, not all investors share these concerns.
Inflation (United States):
Today's main event will be the meeting of the Board of the European Central Bank. Although the meeting itself is not so interesting, as there is no doubt that the parameters of the monetary policy will remain unchanged. Interest is aroused by the subsequent press conference of Christine Lagarde. The only question is whether the head of the European Central Bank will touch upon the catastrophic collapse of consumer activity. After all, the sharp rise in consumer prices in Europe led to an instant reduction in retail sales. Moreover, sales declined much more than consumer prices rose. This means that even if inflation continues to rise in the direction of the target level, sales will decline much more, and there will be no benefit from these movements. On the contrary, it will only make things worse. So, the European Central Bank now also needs to engage in stimulating consumer demand. Although this is exactly what the quantitative easing program is aimed at. In general, if Christine Lagarde touches on this topic, it means that the European Central Bank may well expand the volume of money issuance. Such actions do not really please investors, especially large ones. Ergo, the euro will clearly go down after that.
Refinancing rate (Europe):
Instead of resuming the previously set correction course, the EUR/USD currency pair continued to follow the pullback stage from the support point of 1.1830.
Market dynamics do not have high indicators, but speculative activity periodically occurs, which leads to impulsive price changes in the market.
If we proceed from the current location of the quote, we have an upward move with a scale of 100 points from the pivot point. This led to a convergence of the price with the area of the periodic level of 1.1950.
Considering the trading chart in general terms, the daily period, it is worth noting that all the available fluctuations occur in the structure of the correction course from the peak of the medium-term trend of 1.2349 --> 1.1835.
In this situation, much will depend on the information flow. But from the point of view of technical analysis, it is important to pay attention to the level of 1.1950, since depending on whether the quote is held above or below it, the subsequent course in the market will be clear.
From the point of view of complex indicator analysis, it can be seen that the indicators of technical instruments have a variable signal, but in general they are justified. Thus, the hourly interval follows in the stage of a pullback from the support point of 1.1835, signaling a buy. Meanwhile, the daily period gives a sell signal due to the fact that it is focused on the correction stage from the peak of the trend.
