EURUSD little changes sharply falling headline inflation in the Eurozone. Attention are on the ECB statement on Thursday as the euro area inflation rate drop. A change in the EURUSD is unlikely before tonight’s FOMC cabinet meeting.
Preliminary figures from the European Union’s statistical office, Eurostat, show that core inflation in the Euro Area was unchanged from last month in January but that headline inflation plummeted drastically.
EUR Inflation Unchanged – Eurostat
The greatest yearly rate is anticipated for energy in January (17.2% vs. 25.5% in December), trailed by food, drink, and cigarettes (14.1% vs. 13.8% in December).
Eurozone PMI Higher
The final Euro Area manufacturing PMI announcement earlier in the session reached a five-month high of 48.8 compared to 47.8 in December. S&P Global, a data provider, claims that although the manufacturing sector is still in contracting zone (under 50), a slower rate of shrinkage “implies the worst of the sector’s collapse has gone.”
EURUSD UMMOVED
Following the release, little has moved for EURUSD, which is currently range bound and stuck under 1.0900. Support can be found around 1.0790 and 1.0800, while the initial resistance zone is located around 1.0937.
A recent multi-month peak mark. Market participants will now be getting ready for a flurry of central bank policy announcements, starting with the FOMC rate decision at 19:00 GMT today, followed by Fed chair Powell’s media briefing 30 minutes later, just before Bank of England and the ECB each proclaim their most recent moves the following day at 12:00 GMT and 13:15 GMT, respectively.
EUR examines EMU statistics and the FOMC decision
In the middle of the week, the EURUSD rises for the second time in a row on the strength of the resumed offered stance in the dollar and prior of significant data points on the both sides of the Atlantic in addition to the crucial FOMC meeting slated for later in the European evening.
The US job market’s underwhelming performance in Q4 2022 prompted a knee-jerk reaction in the dollar, which at the same time reinforced the notion that the Fed might soon change course.
EURUSD in US Fed Perspective
In the lead-up to the FOMC meeting and the ECB event, the sharp return allows the EURUSD to flirt once more with the important 1.0900 perimeter.
While waiting for the ECB and the Federal Reserve to meet next week, price movement in relation to the euro may remain to carefully track dollar fundamentals as well as any prospective policy changes.
Relating to the euro area, recession worries now seem to have subsided, but they continue to be a major element supporting the single currency’s rebound and the ECB’s hardline stance.
EURUSD levels to watch
The current resistance level for the pair is 1.0929 (2023 high January 26), followed by 1.0936 (weekly top April 21 2022), and then 1.1000. (round level). However, a breach of 1.0802 (the weekly bottom from January 31) would strive for 1.0766 (the weekly bottom from January 17), eventually leading to 1.0625. (55-day SMA).
