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The German Prelim CPI Overview

The  German  inflation data is up for release later this session at 1200 GMT, with the CPI figures expected to rebound to 0.3% m/m in May, while accelerating to 1.8% annually.

Germany’s regional CPIs released  earlier today suggest an upbeat outcome of the harmonized German CPI readings due to be reported later today. North Rhine Westphalia inflation for the month of May MoM came in at 0.4% versus 0.0% prev. In Hesse, MoM arrived at 0.5%, versus 0.0% prev. Meanwhile, in Bavaria MoM also rebounded to 0.5%, versus -0.1% last. In Saxony, May inflation MoM stood at +0.5% versus +0.0% previous, while Baden-Wuerttemberg’s also came in at MoM 0.5% vs. +0.0% prior.

How could it affect  EUR/USD?

According to Slobodan Drvenica at Windsor Brokers, “current bounce is seen as positioning for fresh weakness, following failure on an initial attack at 1.15 support. Strong bearish momentum and daily MA’s in firm bearish setup, support the notion. Falling 5SMA (1.1624) is expected to ideally cap recovery, with extended upticks to face strong barriers at 1.1681/95 (broken weekly cloud top / Fibo 38.2% of 1.1996/1.1509, reinforced by falling 10SMA). An eventual break below 1.15 handle would open Fibo support at 1.1447 (50% retracement of 1.0340/1.2555 rally). Only break and close above 10SMA would sideline bears for stronger correction.”

Key Notes

German inflation is due for release, in advance of the euro area figure tomorrow

EUR/USD Forecast: Is EUR heading back to Jan 2017 lows?

European FX Outlook: German inflation is set to rise on fuel prices

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).