Article by ForexTime
EUR/USD is trading on the defensive, giving up a narrow oscillation around the 1.1200 level and dipping below 1.1170. Monday’s five-week low at 1.1160 will likely be tested as rates continue to favor the greenback. The dollar will likely remain bid into Friday’s U.S. jobs report, while sub-forecast Eurozone January PPI helped keep the pressure on the euro.
Eurozone January PPI fell to -3.4% year over year, from -2.6% year over year in December. Prices were down 0.9% month over month. The deceleration was stronger than anticipated, but again mainly driven by energy price inflation, which dropped -10.2% year over year, although as the decline is feeding through the product chain, intermediate goods prices also decline markedly and excluding energy the rate dropped to -0.7% year over year from -0.4% year over year. Still, February headline HICP numbers Monday already signaled that the negative impact of energy price declines is starting to wane.
German retail sales jump higher in January, rising a much stronger than expected 2.9% month over month, while December was revised up to 0.6% month over month from 0.2% month over month reported initially. The annual rate climbed to 5.3% year over year at the start of the year. Low unemployment, rising wages and the lift in real disposable income from lower oil prices are driving shoppers to the tills and consumption is likely to remain a main driver of overall GDP growth this year.
After rebounding during February to the 1.15 the EUR/USD has traded under pressure and is testing the January lows. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a sell signal. This occurs when the spread (the 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the spread. The index moved from positive to negative territory confirming the sell signal.
Article by ForexTime
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