Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
EUR/USD Update: Euro Area Inflation Declines for the First Time Since July 2021

EUR/USD Update: Euro Area Inflation Declines for the First Time Since July 2021

Zain Vawda, Analyst

EUR CPI Key Points:

EUR Forecast
EUR Forecast
Recommended by Zain Vawda
Get Your Free EUR Forecast
Get My Guide

The CPI and Forex: How CPI Data Affects Currency Prices

Euro Area annual inflation comes in at 10% for November, down from 10.6% in October to post its first decline since July 2021. Energy continues to have the highest annual rate but declined from 41.5% in October to 34.9% in November. Food, alcohol and tobacco prices rose to an annual rate of 13.6% compared to 13.1% in October. Core inflation data which excludes energy, food, alcohol and tobacco was steady and matched estimates with a print of 5%.

Graphical user interface, text, application, email  Description automatically generated

Customize and filter live economic data via our DailyFX economic calendar

The data coupled with softer readings from Germany, Spain and Belgium will no doubt give the European Central Bank a lot to ponder heading toward its December 15 meeting. Having hiked interest rates 75bp at its previous two meetings the question for markets is whether they are ready to slow the pace down to 50bp (Markets currently pricing in 54bp). Recent comments from ECB President Christine Lagarde would indicate that a slowdown may not be on the cards as Lagarde stated that inflation has yet to peak. ECB policymaker Isabel Schnabel meanwhile recently stated it may be too early to slow down the pace of rate hikes which makes Decembers meeting all the more intriguing.

How to Trade EUR/USD
How to Trade EUR/USD
Recommended by Zain Vawda
How to Trade EUR/USD
Get My Guide

Later today we have Fed Chair Jerome Powell speaking which is likely to give EUR/USD some medium-term direction. Expectations are that Powell may come out hawkish given his recent comments which bodes well for the dollar and could see EUR/USD make its way lower with parity becoming a possibility once more.

Market reaction

EURUSD 15M Chart

Chart, histogram  Description automatically generated

Source: TradingView, prepared by Zain Vawda

Initial reaction saw a 25pip spike higher for EUR/USD. The data on its own is unlikely to see EUR/USD break out of its weekly range with the speech by Fed Chair Powell later today likely to have a bigger impact.

On the larger timeframes, EUR/USD is set to face pressure the longer it stays below the 1.0500 area. Dollar dynamics continue to drive the pair and US data as well as the speech by Fed Chair Powell later today should give the pair some direction. A clean break and candle close above the 1.0500 area is needed for the bullish momentum to continue while a break below the 1.0350 area could open up a test of the 1.0200 support area before a test of parity may come into play.

Key Intraday Levels Worth Watching:

Support Areas

  • 1.02000
  • 1.03500

Resistance Areas

  • 1.05000
  • 1.06000

--- Written by Zain Vawda for

Contact and follow Zain on Twitter: @zvawda

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