German Prelim CPI Overview
Wednesday’s Eurozone economic docket headlines the Harmonized German Preliminary Consumer Price Index (CPI) data, up for release later this session at 1200 GMT.
The headline CPI is expected to come in at +0.1% MoM and the yearly rate is seen sharply lower at +0.5% in April, mainly in response to the coronavirus lockdown induced demand destruction and the oil-price slump.
Ahead of the release, the market gauge of long-term Eurozone inflation expectations fell below 0.9% for the first time in a week.
The acceleration in Germany's regional CPIs, reported earlier today, to paint a better picture of the harmonized German CPI readings.
In Hesse, MoM inflation for the month of April arrived at +0.5%, versus -0.3% prev. Meanwhile, in Bavaria, the April inflation came in at 0.5% MoM versus 0.0% last. In Saxony, April inflation MoM rose by 0.4% versus +0.1% previous while Brandenburg’s came in at +0.6% MoM vs. +0.1% prior. North Rhine Westphalia April CPI arrived at +0.3% MoM vs. 0.0% prior.
How could it affect EUR/USD?
FXStreet’s Senior Analyst Yohay Elam offers key technical levels for trading EUR/USD heading into the key macro events: “Euro/dollar has been confined to a range, with strong resistance awaiting at 1.0890, Tuesday's top, the place where the 200 Simple Moving Average on the four-hour chart hits the price, and a resistance line from last week. It is followed by 1.0930, 1.0995, and 1.1050.”
“The bottom of the range is 1.0810, the low point on Tuesday and support line from mid-April. It is followed by 1.0770, 1.0730, and 1.0640,” Yohay adds.
About the German Prelim CPI
The Germany consumer price index released by the Statistisches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends. A high reading is positive (or Bullish) for the EUR, while a low reading is negative (or bearish).
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