Today, the final data on inflation in Europe will be released, which should confirm the fact of its deceleration from 1.3% to 1.1%. Naturally, the decrease in inflation does not please investors in any way, and in theory, it should negatively affect the single European currency. However, investors have already taken into account such disappointing news, immediately after the publication of preliminary inflation data. So only if the final data does not suddenly coincide with the preliminary data, is it worth waiting for at least some kind of market reaction. But this is unlikely, since a discrepancy between the final inflation data and the preliminary data is extremely rare. Especially when it comes to Europe, while in the United States such surprises happen much more often. At the same time, the very fact of a slowdown in inflation, albeit not instantly, but in the medium term, will have a serious impact on the single European currency. Moreover, a negative. Indeed, for the European Central Bank, inflation is the main factor in determining not only the level of the refinancing rate, but also all other parameters of monetary policy. Well, the classical theory says that if inflation is low, then you need to adhere to a soft monetary policy. So the decrease in inflation is clearly not conducive to the thought process in the heads of the European Central Bank, in the direction of tightening monetary policy parameters.
Following a significant inertial move, the EUR/USD pair found periodic support in the region of 1.1066, where against the background of a local oversold, a pullback to the previously passed level of 1.1100 was formed. Considering everything that happens in general terms, we see that the downward trend has won over 85% of the recent oblong correction, which is a good sign for the main downward trend.
It is likely to assume that the current slowdown of the versatile candles such as "Doji", serves as a kind of waiting platform, which can lead to an increase in volumes and as a fact a surge in the market. Control points at the current time are 1.1120, with an upward stroke and 1.1066, with a downward stroke. These points are considered when placing trades.
Specifying all of the above in trading signals:
• Long positions are considered in terms of a corrective move, where in case the price is consolidated above 1.1120, you can consider the move to 1.1150.
• Short positions are considered in terms of the continuation of the inertial course, where in case of consolidating the price below the local low of 1.1066, we will have a path to the psychological level of 1.1000 (+/- 30 points).
From the point of view of a comprehensive indicator analysis, we see that indicators on minute time passes are volatilely inclined towards purchases, but in view of stagnation, I would be wary of this signal. The intraday and long-term periods hold a downward interest in themselves due to the general market background and inertia.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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