The European currency shows moderate growth, developing a weak "bullish" signal formed at the beginning of the week. The EUR/USD pair is again trying to consolidate above the psychological level of 1.0000, taking advantage of some weakening of the positions in the US currency.
Quotations are also supported by expectations of an imminent tightening of monetary policy by the European Central Bank (ECB), and the rate of increase in interest rates may be higher than planned, given the record level of inflation in the countries of the region. The next meeting of the regulator is scheduled for September 8 and at the moment analysts expect a correction in the value in the range of 25 basis points to 50 basis points. In July, the ECB raised rates by 50 basis points for the first time since 2011.
Meanwhile, inflation in Germany, according to data released yesterday, accelerated from 7.5% to 7.9% in annual terms, while the monthly rate slowed down from 0.9% to 0.3%. The Harmonized CPI for the same period increased from 8.5% to 8.8%, which coincided with analysts' forecasts. Some of the decline was due to cheaper gasoline, while food and energy prices continue to rise. Today, investors expect the publication of August statistics on consumer inflation in the eurozone. The annual rate is expected to rise to a new all-time high of 9.0%.
Meanwhile, the energy crisis in the EU is getting worse. The current EU presidency of the Czech Republic has initiated an urgent meeting of energy ministers on September 9 to discuss emergency steps to reverse the situation with a sharp increase in fuel prices after the imposition of sanctions on gas supplies from Russia (quotes are currently held in the region of 2.840 thousand dollars per thousand cubic meters). The President of the European Commission, Ursula von der Leyen, announced that they are working on an emergency structural reform of the eurozone electricity market in order to minimize dependence on imports. In particular, it is planned to allocate 300.0 billion euros for the transition to renewable energy sources.
Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range is narrowing, reflecting the emergence of corrective growth in the trading of the current week. MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought EUR in the ultra-short term.
Resistance levels: 1.0050, 1.0100, 1.0150, 1.0200. | Support levels: 1.0000, 0.9950, 0.9900, 0.8950.