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EURUSD Market Update

9/12/2022 12:26 PM

The EUR/USD pair is trading in a corrective trend around 1.0080.

Investors are evaluating the results of the meeting of the European Central Bank (ECB), in which the interest rate was raised by a record 75.0 basis points, as well as the agency's forecasts regarding the dynamics of consumer prices and economic growth in the region soon. Thus, officials have corrected preliminary estimates upwards, and now the expected inflation this year is 8.1% against the background of the June scenario of 6.8%, and in 2023 – 5.5% instead of 3.5% previously. However, the ECB believes that the gross domestic product (GDP) this year will adjust to 3.1%, which is better than the 2.8% recorded in the previous forecast, but in 2023, a decline to 0.9% from 2.1% is likely to follow. Concerning economic sentiment, they continue to deteriorate rapidly, and the negative dynamics yesterday were confirmed by Advance. The publication notes that some leading German enterprises have already spoken out in favor of a possible complete shutdown of production if supply chain disruptions continue and gas prices remain at a record high.

Meanwhile, the US currency is correcting downwards, holding around 108.5 points in the USD Index from the beginning of trading. Investors are in no hurry to open new positions in anticipation of tomorrow's publication of data on the dynamics of consumer prices. Analysts suggest that inflation in the US will slow down in August from 8.5% to 8.1% earlier, while the base value will accelerate from 5.9% to 6.1%.

The trading instrument is within the global downward channel, having reached the resistance line yesterday. Technical indicators continue to hold a sell signal: fast EMAs on the Alligator indicator are consolidated below the signal line, and the AO oscillator histogram is forming new bars deep in the sell zone.

Support levels: 1.0000, 0.9800. | Resistance levels: 1.0160, 1.0400.

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