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Euro zone inflation misses with 1.5% – EUR/USD tumbles down

Inflation is a global issue, better said: lack thereof. Headline CPI missed expectations with only 1.5% y/y in November in the Flash report. Core inflation also fell short with only 0.9%. Good news does come from the unemployment front: a surprising fall to 8.8%. The peak was above 12% in 2013.  

EUR/USD is falling, hitting a new session low of 1.1810, below support at 1.1820. Further support awaits at 1.1780 and then 1.1720.

Here is the euro/dollar 30-minute chart:

Eurostat was expected to report a rise in inflation in its initial report for November. A rise from 1.4% y/y to 1.6% y/y is expected. Core inflation was forecast to pick up from 0.9% to 1%. Early indicators from Germany showed a stronger-than-expected inflation read of 1.8% y/y, while Spain missed expectations with 1.6%. The euro-zone unemployment rate was projected to remain unchanged at 8.9%.

EUR/USD was trading around 1.1830, very much in the around the levels seen since yesterday morning. The pair slipped off the highs it reached on Friday. This is mostly due to the dollar’s strength: a robust GDP read, an upbeat speech from Yellen and also hopes for a successful vote on tax cuts in the US Senate all gave a boost to the greenback.

Earlier in the day, we learned that German retail sales missed expectations with a big drop of 1.2%, much worse than an increase of 0.3% expected.

More:  EUR/USD: Primed For Another Look At Higher Levels

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.