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How to trade the Euro-zone CPI Inflation with EUR/USD

  • September's flash inflation report is watched closely by the ECB and moves the Euro.
  • The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
  • the EURUSD moved, on average, 9 pips in the 15 minutes after the data release and 33 pips in the following 4 hours.

Buying EUR/USD Scenario

  • Tradable Positive Trigger: +1.41 deviation (2.15%) [BUY Pair]
    Key Resistance Level: 1.1750

This time, if it comes out at higher than expected with a relative deviation of 1.41 or higher(2.15 or higher in actual terms), the pair may go up reaching a range of 13  pips in the first 15 minutes and 64 pips in the following 4 hours.

1.1720 was a separator of ranges in late September. 1.1750 served as a quadruple top in July and remains relevant as resistance. 1.1815 was the peak in recent days and the highest level since July. 1.1850 is next up.

Selling EUR/USD Scenario

  • Tradable Negative Trigger: -2.04 deviation (2.01%) [SELL Pair]
  • Fundamental Support Level: 1.1650

If it comes out lower than expected at a relative deviation of -2.04 or less(2.01 or lower in actual terms), the EURUSD may go down reaching a range of 19 pips in the first 15 minutes and 61 pips in the following 4 hours.

1.1690 was a pivotal line in mid-September. It is followed by the strong support level of 1.1650. Next, down the line, we see 1.1605 which supported the pair in mid-September. 1.1565 was the low point last week.

EUR/USD Levels on the Chart

EUR USD Technical Analysis September 28 2018

More data

Inflation is expected to increase this time, rising above the 2% target that the European Central Bank eyes. The initial release of CPI data tends to have a more significant impact than the following ones.

In the last five releases, the EURUSD moved, on average, 9 pips in the 15 minutes after the data release and 33 pips in the following 4 hours. The previous release had no surprise. 

Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.

Author

Yohay Elam

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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