When is the German Prelim CPI and how could it affect EUR/USD?
The German Prelim CPI Overview
The German inflation data is up for release later this session at 1200 GMT, with the CPI figures expected to tick higher to 0.1% m/m and to 2.0% y/y in September.
Upbeat Germany's regional CPIs released earlier today paint a rosy picture of the harmonized German CPI readings due to be reported later today. In Hesse, MoM inflation for the month of September arrived at +0.5%, versus -0.1% prev. Meanwhile, in Bavaria, the September inflation came in at +0.5% MoM versus +0.2% last. In Saxony, September inflation MoM ticked higher to +0.4% versus +0.0% previous, while Brandenburg’s came in at +0.3% MoM vs. -0.1% prior.
How could it affect EUR/USD?
Slobodan Drvenica at Windsor Brokers notes that technically, “today’s extension below former congestion low (1.1724) and Fibo 38.2% of 1.1526/1.1815 upleg (1.1704) was an additional bearish signal. Close below the latter is needed to confirm scenario and open supports at 1.1662/52 (converged sideways-moving 20/100SMA’s), with extension towards next strong supports at 1.1641/36 (rising 30SMA / Fibo 61.8% of 1.1526/1.1815).
Despite significantly weaker structure on lower timeframes, momentum on daily chart remains firm and still holding above its 7-d SMA, which could affect fresh bears.
Overall bullish picture sees dip-buying favoured while 30SMA holds dips. Res: 1.1711; 1.1738; 1.1757; 1.1780. Sup: 1.1670; 1.1652; 1.1641; 1.1617.”
Key Notes
Germany: Inflation to stabilize - TDS
EUR/USD off lows, back above 1.1700 handle but lacks follow-through
Daily Recommendations on Major - EUR/USD
About the German Prelim CPI
The Germany consumer price index released by the Statistisches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends. A high reading is positive (or Bullish) for the EUR, while a low reading is negative (or bearish).