German CPI preview: What to expect of EUR/USD?

By FXStreet FXStreet (Mumbai) – The demand for the shared currency made a comeback today, taking the EUR/USD pair higher to 1.0977 ahead of the German CPI reading for October. An upbeat Eurozone sentiment index and German jobless data added to the bullish momentum today.

German CPI seen improving

The preliminary reading is seen improving to 0.2% m/m from 0.0%, while the annualised CPI is seen dropping 0.1%, compared to a 0.2% drop seen in September. The regional German CPI data released earlier today printed better-than-expected and that has kept the EUR on a strong footing ahead of the German CPI release.

In case, the CPI prints in line or higher than estimates, the EUR could extend its upward journey. Moreover, the Fed’s hint at December liftoff has underscored the divergent policy path adopted by the Fed and the ECB. At the same time, it is widely expected to reduce the need for more ECB easing in December. Consequently, a better-than-expected CPI figure could trigger a sharp correction in the EUR/USD pair.

On the other hand, a weaker-than-expected print would underscore the need to do more QE and push the EUR back near its daily lows.

EUR/USD Technical Levels

At the moment, the …read more

Source:: FX Street