Preliminary inflation data in the euro area

• Core Consumer Price Index (CPI) (y/y), fact 1.1%, forecast 1.0%.
• Consumer Price Index (CPI) (y/y) (January), fact 1.4%, forecast 1.4%.

Preliminary data on inflation in the euro area showed a moderate growth on an annualized basis. It strengthened optimism regarding the single currency, which continues strengthening, despite weak data on business activity in Europe.

Fig. 1. Eurozone core consumer price index (CPI) y/y chart

These statistics in the context of the resumption of the decline of the dollar and the weakness of the British pound is a significant driver for the strengthening of the single currency, which ultimately could return the euro to growth against its main competitors. The EUR/USD pair retains its potential for growth, limited to overbought. Resistance levels: 1.1500 and 1.1530, support: 1.1450 and 1.1430.

Fig. 2. EUR/USD chart. Current price – 1.1470

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Hanzenko Anton

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