EUR/USD Cautious After Eurozone Inflation
EUR/USD – H1
Eurozone Consumer Price Index rose 5.0% y/y in December, in line with the preliminary figure, but higher than November +4.9% y/y. The Core reading was +2.6% y/y, same preliminary and prior readings.
Germany factory inflation though, surged according to this morning's data, which showed Producer Price Index of +24.2% year-over-year last month, versus +19.2 in November.
Earlier, ECB President Ms Lagarde commented that the because of the difference in economic recovery the ECB has "every reason not to act as rapidly and as brutally that one can imagine the Fed would do" as reported by Reuters. [1]
Markets will now turn to the accounts of the European Central Bank's monetary policy meeting (12:30 GMT) and US weekly Jobless Claims (13:30) for direction.
EUR/USD comes from a very good week, but during the current one, it erased its progress and despite yesterday's rebound, it appears cautious so far today.
Having rejected the key 38.2% Fibonacci of the "September High/November Low" drop, bias remains on the downside, and we remain cautious about its upward aspirations. As such, it is vulnerable to the ascending trend-line from November's 2021 lows (at around 1.1300-1.1290), but it is probably early to talk about a larger drop towards 1.1221.
On the other hand, the pair rebounded yesterday and tries to stay close to its EMA100, above which it will have the chance to push towards 1.1400-1.1415, but a catalyst will be required for a broader recovery.
Past Performance: Past Performance is not an indicator of future results.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 19 Apr 2026 https://www.reuters.com/world/europe/ecbs-lagarde-inflation-drivers-will-ease-gradually-2022-2022-01-20/ |
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