EURUSD: Much more. Another fly in the ointment for the euro from ECB economists

Trading 26 juil 2019 Donner votre avis

Today is practically empty for fundamental data that could have led to at least any change in the current market situation. Economists continue to analyze yesterday's series of statements by the President of the European Central Bank, which still keeps major players from further action before the weekend.

Let me remind you that yesterday, Mario Draghi noted a good growth in employment and wages, which continue to support the economy, but pointed to the threat of protectionism and geopolitical factors that increasingly affect business and worsen market sentiment. The European Central Bank also signaled its readiness to reduce interest rates and, together with the launch of a number of mitigating measures. However, it should be noted that this meeting did not discuss the scale of rate cuts and the volume of asset purchases.

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Skepticism in the market added a forecast of economists of the European Central Bank, which lowered the inflation forecasts in the eurozone in the coming years. This revision is not surprising in the current environment, where the economy is once again showing a slowdown, even despite the stability of the labor market. Most likely, during the next meeting of the central bank in September this year, ECB leaders will announce new measures to stimulate the economy.

According to today's report, ECB experts have reduced inflation forecasts until the end of 2021.

Thus, 52 experts interviewed by the central bank said that they forecast inflation at the level of 1.3% in 2019, and at the level of 1.4% in 2020. In 2021, inflation will decrease even more and will be 1.5%. As for longer-term inflation, it is expected at 1.7%, that is, in any case, it will not reach the target of 2.0% set by the European Central Bank. All this once again indicates how difficult it is for the European regulator to resolve the situation with low inflation, even despite the low and negative interest rates in the eurozone.

As for the risks that could further aggravate the situation with inflation, they include a slowdown in the eurozone economy, as well as weak growth rates of global GDP. The situation on foreign markets, which already rolled down in a recession, the manufacturing sector of the eurozone, also has a disinflationary impact.

As for the fundamental data that came out today in the morning, we can only note the consumer confidence in France, which, surprisingly, increased in July this year.

According to the statistics agency, the consumer confidence index in France in July this year rose to 102 points against 101 points in June, while economists had forecast a decline in the index to 100 points.

As for the technical picture of the EURUSD pair, it is still unchanged.

The market is still in the balance, but the bears will try to continue the downward trend. This requires a breakthrough of the intermediate support of 1.1125, which will push the trading instrument even lower in the area of the monthly lows of 1.1100 and 1.1040.

If buyers of risky assets try to return to the market, then an intermediate area of 1.1155 will act as resistance, but a larger level is seen in the area of 1.1185.

The material has been provided by InstaForex Company - www.instaforex.com

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