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© Reuters.
Investing.com – The pair has not reacted well to the positive surprise of European inflation. The preliminary CPI for the euro area for November stood at 10%, below the 10.4% forecast and the 10.6% of the previous month.
EUR/USD’s lack of reaction is partly explained by annual core CPI, which was in line with expectations and flat against the previous month at 5%. On the other hand, the IPCA, excluding food and energy, showed a surprising rise to 6.6%, compared to 6.3% expected and 6.4% previously.
In other words, behind the apparently positive surprise of lower-than-expected inflation lies a more complicated backdrop, showing that it is mainly energy and food that are responsible for the decline in inflation, which means that the tide could turn quickly.
This means that the ECB may find today’s inflation figures bittersweet, as it is unlikely to conclude that it is starting to win its battle against inflation.
Thus, while the euro-dollar was trading around 1.0358 at the time of publication of the data, the pair has already reached highs of 1.0380.
Several US statistics will likely influence EUR/USD on Wednesday ahead of Powell’s speech
EUR/USD traders’ attention now turns to the United States, with a busy economic schedule this afternoon, beginning with the ADP Jobs Report for November at 2:15 PM ET (02:15 PM ET). Economists believe that 200,000 jobs will have been created, after 239,000 the previous month.
The preliminary GDP for the third quarter will also be the center of attention, and everything indicates that quarterly growth will rise to 2.7%, after the previous 2.6%.
Also published in the GDP report is the PCE consumer price index, a measure of inflation that the Federal Reserve pays close attention to.
In the end, it will be the Fed that will command investors’ attention, with Jerome Powell’s speech at 7:30 PM ET, followed by the release of the central bank’s Beige Book at 8:00 PM ET. .
>> Find out the real-time results of all the important statistics for the EUR/USD today in our economic calendar.
200-day MA remains a key hurdle for EUR/USD
Chartically, many traders are closely following the 200-day moving average (blue on the chart below), which has been tested several times in recent weeks, although EUR/USD has failed to hold for above it.
Euro Dollar (EUR/USD) – Daily chart
Currently at the 1.0373 level, this 200 MM is an immediate hurdle for the currency pair, ahead of the psychological threshold of 1.04 and after Monday’s highs at 1.0497. In the event of a correction, the psychological threshold of 1.03 will be the first potential support level, before the lows recorded on November 21 at 1.0223.
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