Inflation data out of France and Spain are predicted to show the absence of annualized inflationary pressures. The ECB has restarted its quantitative easing program in November, with no impact on inflation. Forex traders will also look forward to the 2019 GDP figure for Germany, which is expected to show an anemic growth rate of just 0.6% annualized. The EURUSD enjoys a strong bullish trend, how will price action be impacted following the release of today’s economic data? Today’s fundamental analysis will take a look at price action in both directions.
US inflation data is also expected to show no inflationary pressures as measured by the PPI. Yesterday’s CPI report showed inflation above the Fed’s 2.0% annual target. A regional report will be released as well, which will get more attention due to the series of disappointments in a growing number of regional reports. The Fed Beige Book will provide a final volatility event for the EURUSD, how will this currency pair react? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for Euro trades:
- Preliminary French CPI: The Preliminary French CPI for December is predicted to increase by 0.4% monthly and by 1.4% annualized. Forex traders can compare this to the French CPI for November, which decreased by 0.1% monthly, and which increased by 1.0% annualized. The Preliminary French Harmonized Spanish CPI for December is predicted to increase by 0.5% monthly and by 1.6% annualized. Forex traders can compare this to the French Harmonized CPI for November, which increased by 0.5% monthly and 1.6% annualized.
- Preliminary Spanish CPI: The Preliminary Spanish CPI for December is predicted to decrease by 0.1% monthly, and to increase by 0.8% annualized. Forex traders can compare this to the Spanish CPI for November, which increased by 0.2% monthly and 0.8% annualized. Spanish Harmonized CPI for December is predicted to decrease by 0.1% monthly, and to increase by 0.8% annualized. Forex traders can compare this to the Spanish Harmonized CPI for November, which decreased by 0.1% monthly, and which increased by 0.8% annualized.
- German GDP: The German GDP for 2019 is predicted to increase by 0.6% annualized. Forex traders can compare this to the German GDP for 2018, which increased by 1.5% annualized.
- Eurozone Industrial Production: Eurozone Industrial Production for November is predicted to increase by 0.3% monthly and to decrease by 1.0% annualized. Forex traders can compare this to Eurozone Industrial Production for October, which decreased by 0.5% monthly and 2.2% annualized.
- Eurozone Trade Balance: The Eurozone Trade Balance for November is predicted at €22.0B. Forex traders can compare this to the Eurozone Trade Balance for October, which was reported at €24.5B.
Here are the key factors to keep in mind today for US Dollar trades:
- US Empire Manufacturing Index: The US Empire Manufacturing Index for January is predicted at 3.5. Forex traders can compare this to the US Empire Manufacturing Index for December, which was reported at 3.5.
- US PPI: The US PPI for December is predicted to increase by 0.2% monthly and by 1.3% annualized. Forex traders can compare this to the US PPI for November, which was reported flat at 0.0% monthly, and which increased 1.1% annualized. The US Core PPI for December is predicted to increase by 0.2% monthly and by 1.3% annualized. Forex traders can compare this to the US Core PPI for November, which decreased by 0.2% monthly, and which increased by 1.3% annualized. The US Core PPI ex Trade for December is predicted to increase by 0.2% monthly and by 1.3% annualized. Forex traders can compare this to the US Core PPI ex Trade for November, which was reported flat at 0.0% monthly, and which increased by 1.3% annualized.
Should price action for the EURUSD remain inside the or breakout above the 1.1100 to 1.1150 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.1130
- Take Profit Zone: 1.1350 – 1.1410
- Stop Loss Level: 1.1085
Should price action for the EURUSD breakdown below 1.1100 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.1085
- Take Profit Zone: 1.0905 – 1.0975
- Stop Loss Level: 1.1130
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