Inflation figures for the US for January showed a modest increase from anticipated. Inflation rate in January was standing at 3.1% on a yearly basis, a bit higher from 2.9% expected by the market. Core inflation reached 3.9%, above forecasted 3.7%. Core inflation on a monthly basis was 0.4%. Retail sales for January surprised the markets with a drop of -0.8% on a monthly basis, a way below market estimate of -0.1%. Building permits preliminary data for January show a modest decline to 1.47M from anticipated 1.509M. Producers Price Index in January was standing at 0.3% higher from forecasted 0.1%, supporting the market fears of a higher-for-longer inflation. Michigan Consumer Sentiment preliminary for February modestly missed the estimate by reaching 79.6, lower from expected 80.
The ZEW Economic Sentiment Index for the Euro Area for February was 25.0, modestly better than forecasted 20.1. The same index for Germany was also standing better from estimated 17.5, and reached 19.9 for February. There has not been a change in GDP Growth rate for the Euro Area in the second estimate, where it was standing at 0% on a quarterly basis and 0.1% on yearly basis.
It was a second week in a row for eurusd where the currency pair was moving within a relatively lower range. During the previous week, the pair was moving between the highest weekly level at 1.08, then moved down to the lowest weekly level at 1.069, while the currency pair is finishing the week at the weekly starting point, around 1.077. Although the market reacted to the higher US inflation data, still, the retail sales brought back some of the confidence that the inflation might ease in the months to come, so the eurusd returned to levels from the beginning of the week. The RSI moved from the level of 34 up to 42, however, it is still moving closer to the oversold market side, without an indication that is ready to start the reversal. Moving averages of 50 and 200 days are still moving as two parallel lines, without an indication that the potential cross might come soon.
In the week ahead there is no significant data scheduled for a release for the US economy, however, some volatility might bring a release of the FOMC Minutes from Fed`s latest monetary meeting. In this sense, some strong moves to either side should not be expected. Considering that 1.08 resistance has not been clearly tested during the previous week, this might be a target of the currency pair for the week ahead. Also, on the opposite side, there is a lower probability for the 1.067 support line to be tested, except in case of some new information from FOMC minutes, which the market did not yet priced.
Important news to watch during the week ahead are:
Euro: HCOB Manufacturing PMI flash for February for Germany, Inflation rate for February for Euro Area, ECB Monetary Policy Meeting Accounts, GDP Growth Rate final for Q4 for Germany, Ifo Business Climate for February for Germany
USD: FOMC Minutes will be published on February 21st
The ZEW Economic Sentiment Index for the Euro Area for February was 25.0, modestly better than forecasted 20.1. The same index for Germany was also standing better from estimated 17.5, and reached 19.9 for February. There has not been a change in GDP Growth rate for the Euro Area in the second estimate, where it was standing at 0% on a quarterly basis and 0.1% on yearly basis.
It was a second week in a row for eurusd where the currency pair was moving within a relatively lower range. During the previous week, the pair was moving between the highest weekly level at 1.08, then moved down to the lowest weekly level at 1.069, while the currency pair is finishing the week at the weekly starting point, around 1.077. Although the market reacted to the higher US inflation data, still, the retail sales brought back some of the confidence that the inflation might ease in the months to come, so the eurusd returned to levels from the beginning of the week. The RSI moved from the level of 34 up to 42, however, it is still moving closer to the oversold market side, without an indication that is ready to start the reversal. Moving averages of 50 and 200 days are still moving as two parallel lines, without an indication that the potential cross might come soon.
In the week ahead there is no significant data scheduled for a release for the US economy, however, some volatility might bring a release of the FOMC Minutes from Fed`s latest monetary meeting. In this sense, some strong moves to either side should not be expected. Considering that 1.08 resistance has not been clearly tested during the previous week, this might be a target of the currency pair for the week ahead. Also, on the opposite side, there is a lower probability for the 1.067 support line to be tested, except in case of some new information from FOMC minutes, which the market did not yet priced.
Important news to watch during the week ahead are:
Euro: HCOB Manufacturing PMI flash for February for Germany, Inflation rate for February for Euro Area, ECB Monetary Policy Meeting Accounts, GDP Growth Rate final for Q4 for Germany, Ifo Business Climate for February for Germany
USD: FOMC Minutes will be published on February 21st
