EUR/USD breaks below 1.1615 as Eurozone CPI disappoints

InvestingOnline.com 18/07/2018, 10:40

EUR/USD is trading at two-week lows around 1.1600 as investors sold the Euro amid disappointing consumer price index in the Eurozone for June. The cross is trading 0.45% negative in the day.

The Euro is trading negative against the US dollar following news on CPI data in the eurozone. The Pair broke the 1.1650 level earlier in the morning, and it extended losses to trade below the July 13 low at 1.1615, and it is now testing the 1.1600 area, minimums since July 2.

Earlier on the day, Eurostat published a CPI in line with expectations but a core inflation below of what the market was waiting in June. Consumer price index rose 0.1% between May and June, in range of expectations but well below of the 0.5% monthly increase in May.

Year over year, eurozone inflation advanced 2% in the twelve months to June, in line with expectations and at the same pace of the previous month.

However, the market got an ugly surprise concerning core inflation. As an educational topic, the core CPI is a crucial indicator to measure inflation and changes in purchasing trends except food and energy.

Core inflation was flat in June regarding the May level of prices. Below expectations and well below the 0.3% expected by market. Prices in June rose 0.9% from the same month of the last year, less than expected and the May inter annual figure of 1%.

According to the press release, “the lowest annual rates were registered in Ireland (0.7%), Greece (1.0%) and Denmark (1.1%). The highest annual rates were recorded in Romania (4.7%), Estonia (3.9%) and Hungary (3.2%). Compared with May 2018, annual inflation fell in three Member States, remained stable in two and rose in twenty-two.”

EUR/USD finds support at the 1.1600 area

The single currency found support at the 1.1600 level after falling 50 pips from 1.1650 earlier in the morning. The pair is currently working at 1.1620.

Forex technical conditions suggest a short-term bounce as MACD and RSI are signaling some recovery on the ground.