(MENAFN- DailyFX) EUR/USD ANALYSIS TALKING POINTS Eurozone core inflation surprises higher at 5%. EZ GDP echoes dire economic situation in the region.
EURO FUNDAMENTAL BACKDROPRecent eurozone data has added further complications for the particularly concerning . Core inflation beat estimates (see economic calendar below) hitting the 5% mark, following on from last week's German inflation print.
EUROZONE ECONOMIC CALENDAR
Source:
While the December ECB decision looks to be skewed towards a 50bps hike, rising inflation primarily driven by energy prices which filter down to the core figure make it difficult for the ECB not to consider something more substantial. The opposing argument stems from global fears, the ongoing energy crisis as well as lesser stimulus making an aggressive potential fatal for eurozone consumers. Today's statistic is reflective of this as both GDP QoQ and YoY show significant declines.
TECHNICAL ANALYSIS DAILY CHART
Chart prepared by , IG
/ showed minimal reaction to the news as markets mull over contrasting viewpoints as outlined above. With greater headwinds facing the region, as well as the inability of euro bulls to maintain prices above parity last week, I favor a downside bias for the pair towards subsequent support zones.
Resistance levels:
1.0064 (76.4 Fibonacci) 100-day EMA (yellow) 1.0000
Support levels:
50-day EMA (blue) 20-day EMA (purple) 0.9864
IG CLIENT SENTIMENT DATA: MIXEDIGCS shows retail traders are currently LONG on , with 53% of traders currently holding long positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment however, due to recent changes in long and short positioning, we arrive at a short-term cautious disposition.
Contact and followWarrenon Twitter:
MENAFN31102022000076011015ID1105105234
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.