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Breaking News: Spirited Euro Briefly Stalled by Euro Zone Sentiment and Inflation Data

Breaking News: Spirited Euro Briefly Stalled by Euro Zone Sentiment and Inflation Data

Warren Venketas, Analyst

EUR/USD ANALYSIS

  • Euro Zone Economic Sentiment (March) - ACT: 108.5; EST: 109
  • Consumer Inflation Expectations (March) – ACT: 59.8
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EURO FUNDAMENTAL BACKDROP

After a strong open to the trading day EUR/USD slipped post release of Euro zone sentiment and inflation data respectively (refer to economic calendar below). Economic sentiment marginally missed expectations while industrial sentiment came in higher. On the inflation front, a drastic rise since the prior 37.7 figure was largely expected with surging oil and other commodity prices.

EUR/USD ECONOMIC CALENDAR

Euro zone economic calendar

Source: DailyFX economic calendar

In conjunction with the above releases, a speech from the ECB President Christine Lagarde is underway. Inflation concerns and supply chain bottlenecks are featuring as a main concern however she does not see higher prices from fuel and food persisting, while the Asset Purchase Program (APP) is set to conclude in Q3 2022. Lagarde went on to reinforce that stagflation fears are unjustified.

TECHNICAL ANALYSIS

EUR/USD DAILY CHART

EUR/USD daily chart

Chart prepared by Warren Venketas, IG

EUR/USD price action is testing the top of the developing bear flag (blue) but could be superseded should the daily candle close above flag resistance.

Resistance levels:

  • 100-day EMA (yellow)
  • 1.1200

Support levels:

  • 1.1138
  • 50-day EMA (blue)
  • 20-day EMA (purple)
  • 1.1000

Contact and follow Warren on Twitter: @WVenketas

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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