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Euro Shows Ambiguous Trading Dynamics

3/1/2023 10:54 AM

The EUR/USD pair shows mixed trading dynamics, consolidating near 1.0590 and fixing a slight increase in "bullish" sentiments for the instrument in anticipation of new drivers.

The euro came under pressure after the publication of data on inflation in France and Spain, which, at the same time, increased the chances for the continuation of the "hawkish" policy from the European Central Bank (ECB). In February, the Consumer Price Index in France accelerated from 7.0% to 7.4% in annual terms, while analysts expected the dynamics to remain at previous levels, and in monthly terms it rose from 0.4% to 1.0% which was in line with the forecasts. Despite the further increase in the interest rate by the ECB, which generally supports the single currency, the renewed growth of inflation in the region is perceived as a dangerous signal. Recall that earlier in France there were mass protests against the pension reform. Spanish inflation for the same period accelerated from 5.9% to 6.1%, while analysts expected a possible weakening to 5.7%. On a monthly basis, the CPI added 1.0% after declining by 0.2% in January, while forecasts assumed a zero trend. Today, investors are focusing on statistics from Germany, where the Consumer Price Index is predicted to slow down in February from 8.7% to 8.5% in annual terms and from 1.0% to 0.6% in monthly terms.

Bollinger Bands in D1 chart demonstrate a moderate decrease. The price range expands slightly, making way for new local lows for the "bears". MACD indicator tries to reverse to growth and to form a new buy signal (the histogram is about to consolidate above the signal line). Stochastic is showing a more confident growth and is located in the middle of its area.

Resistance levels: 1.0600, 1.0654, 1.0700, 1.0765. | Support levels: 1.0550, 1.0500, 1.0450, 1.0400.

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