EUR/USD: Euro Fading Into Central Bank Week

The euro picked up some support ahead of the European session as German PPI data beat estimates that could point to continued inflationary pressures within the German economy. This falls in line with yesterday’s CPI report but the tone set out by ECB officials seems to be more dovish as economic growth concerns in the region ramp up.

With roughly two additional interest rate hikes expected between now and year end, the likelihood of a 25bps increment next week is almost certain. What markets will focus on is forward guidance post-July which could provide some clarity as to the ECB’s thinking and where to next for EUR/USD. The ECB’s Governing Council member Yannis Stournaras already stated that the eurozone may not be able to withstand further monetary policy tightening after July leaving the door open for a weaker euro should this come to fruition.

Later today, US jobless claims and EZ consumer confidence data will drive interest and add yet another notch to the overall economic picture for the respective regions.

Operación activa:

- German PPI beat struggles to keep euro afloat.
- US jobless claims and EZ consumer confidence in focus later today.
- Overbought euro could be in for downside correction.

Operación cerrada: objetivo alcanzado:

It went right in my direction