- German CPI Y/Y reading 1.6% vs 1.5% exp and 1.6% prior
- M/M: 0.0% vs -0.1% exp. 0.4% prior
- EURUSD below 1.21; EURCAD approaching key support
The latest inflation data from Germany has come in slightly higher than expected, allaying some fears that price pressures may be set to fall back into negative territory. The CPI Y/Y reading remained in line with the prior print, 1.6% vs 1.5% expected. The M/M figures also beat forecasts, with consensus expectations calling for a -0.1% print but the reading itself fell less than expected to 0.0% from 0.4% previously.
Inflation readings throughout Europe have been drifting lower over the past year or so, but against expectations the German April CPI didn’t decline. Source: XTB Macrobond
Heading in to today’s data the expectations for the drop were due to a miss in the latest Italian reading, whilst the timing of Easter this year was also seen by some as a negative impact. However, in not dropping the data was mildly pleasing, especially considering that Germany is the largest economy in the Eurozone.
The EURUSD made what still looks like a decisive break lower last week, shortly after the ECB meeting and today there’s been some more downside with the pair below the 1.21 handle and not far from a 4-month low. Even though this inflation data was better than expected it is unlikely to be enough to reverse the course of the single currency which remains under pressure.
EURCAD could be approaching a potential neckline in a S-H-S setup. Source: xStation
Another Euro pair that could be worth keeping an eye on is the EURCAD. This cross has also been moving lower today and price is approaching what could be seen as a potential neckline in a head and shoulders setup. The level to watch is a little subjective with some analysts maybe preferring a sloping line which would currently be around 1.5530, whereas other may take the swing lows at 1.5460. Either way price is trading not far from it and a decisive break lower could pave the way for a substantial decline.
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