Solid News

Inflation in the Euro Area for the First Time Exceeded 10%

11/1/2022 12:48 PM

The EUR/USD pair is moving within a corrective trend around 0.9937 against poor macroeconomic statistics.

Although the European Central Bank (ECB) continues its active "hawkish" policy, raising interest rates for the third time in half a year to curb record inflation and return the rate to the target of 2.0%, estimates of gross domestic product (GDP) state that Europe will not enter recession by the end of 2022: the Q2 growth was recorded at 0.8% in the euro area and 0.7% in the EU as a whole. At the moment, the annual GDP growth rate remains positive, so formal statements about the onset of a recession in the economy can be made no earlier than April next year. According to yesterday's report, consumer prices in the euro area in October reached 10.7%, exceeding the forecast increase of 10.2%. The maximum indicator increased in the leading European economies – German, French and Italian. Obviously, the basis of the current trend is the so-called "food" inflation, but the base figure, excluding energy and food products, consolidates around 5.0%, with preliminary estimates of 4.8%. All this suggests that the EU economy has yet to face the severe consequences of the energy crisis and the developing military conflict on the territory of Ukraine.

The US currency has stopped fluctuations and is holding around 111.000 in the USD Index, which may change as early as tonight when the data on the labor market JOLTs will be published. New open vacancies in the non-agricultural sector are expected to approach the 2020 values ​​of 10,000M.

The trading instrument is above the resistance line of the global channel.

Technical indicators maintain a buy signal: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram is forming new bars above the transition level.

Resistance levels: 0.9956, 1.0120. | Support levels: 0.9813, 0.9635.

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