With the aid of a video, Hotforex senior Analyst, Stuart Cowell mentions in the 16 January EUR Intraday Technical Analysis that EURUSD has been off its highs as Cable also came to a pause in the upward trend. Get updated.
16 January, HotForex –German HICP inflation was confirmed at 1.6% y/y in December, unchanged from the preliminary reading, which meant prices rose 1.7% y/y on average last year. This is still lower than what the ECB would like for the Eurozone as a whole, and only in February did the headline rate top the ECB’s 2% target.
Justification then for Draghi who pushed through another QE extension with net asset purchases set to continue until September at least, but it seems the central bank is now at least eying a change in the guidance and a firm commitment to an end date for QE, although recent market reactions to the hint of a change in guidance will back those arguing for caution with regard to the tweaks.
Meanwhile, the actual driver of the EUR today was German politics. The euro dropped sharply on political concerns in Germany, with some SPD factions reportedly uncertain, or an outright rejection, of proposals to form a grand coalition. This has rattled EURUSD and euro crosses, which have been aggressively bid in recent sessions.
EURUSD dove by about 60 pips in making a low of 1.2215, which as subsequent rebound above 1.2250 meeting fresh selling that sent the pair back under 1.2225.
16 January EUR Intraday Technical Analysis(+Video)
German Politics Spikes Euro, Pound awaits CPI – EURUSD has been off its highs, traded close to 1.2215 low. Cable also came to a pause in the upward trend that left a post-Brexit vote high of 1.3820 yesterday, on the anticipation of inflation Data shortly.
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