Inflation in Europe remained unchanged. Although it turned out to be slightly worse than forecasts, it was still perceived with optimism. Even though not immediately, but nevertheless. At least, the publication of the data stopped the fall of the single European currency. Investors were seriously afraid that inflation could slow down, which was indirectly indicated by data on individual countries of the euro area, both on inflation and on retail sales. And while inflation remained unchanged, rather than rising as expected, the worst fears were not realized. The growth of the single European currency itself began after the opening of the US session, which suggests that American traders are looking at the single European currency with a much greater degree of optimism.
Inflation (Europe):
In light of yesterday's release of preliminary data on inflation, the main event today will be the publication of data on producer prices, the rate of decline of which may slow down from -1.1% to -0.3%. Given the fact that producer prices are largely a leading indicator for inflation, the slowdown in their decline indicates the possibility of further growth in consumer prices. So, the publication of producer prices will be an occasion for even greater growth of the single European currency.
Producer Prices (Europe):
The EUR/USD currency pair touched an important psychological level of 1.2000 during the past day, where there was a slowdown and, as a result, a natural rebound in the price, with a volume of 90 points.
The market dynamics continue to accelerate, which is confirmed by both the structure of price fluctuations and the volume of speculative operations in the market.
If we proceed from the current location of the quote, then we have a consolidation move of the price in the range of 1.2080/1.2095, which with a high degree of probability will allow speculators to take advantage of the current situation.
Considering the trading chart in general terms, the daily period, it is worth noting that the quote is still in the structure of a corrective move from the trend maximum of 1.2349.
It can be assumed that the movement in the range of 1.2080/1.2095 will not remain without the attention of market participants and soon there will be an impulse move, which will be regarded as a local price change relative to stagnation.
The most optimal trading tactic will be the method of breaking through a particular consolidation boundary.
Concretizing all of the above into trading signals:
- Long positions can be considered in the case of the price fixing higher than 1.2100, with the prospect of a move to 1.2130.
- Short positions can be considered in the case of the price fixing below 1.2075, with the prospect of a move to 1.2050-1.2015.
From the point of view of complex indicator analysis, it can be seen that the indicators of technical instruments on the minute interval have a variable signal due to consolidation. The hourly interval reflects the price rebound in the period of the past day, signaling a purchase. The daily period, as before, follows the correction pattern from the peak of the trend, signaling a sale.
