EURUSD trying to stay above 1 USD
While Friday's US data and FED speakers increased the USD demand and sent the EURUSD under 1.00, Monday's return continued on Tuesday trading hours as well, as the 75 bps rate hike expectation from the ECB is getting more realistic! The main reason for this expectation is hawkish comments from ECB officials, especially after Eurozone inflation numbers.
After the increase in inflation in the Eurozone- published last week- Today's data from the largest European economy show another rise in August. Increasing energy, especially gas and electricity prices in recent months, are now affecting the food and service prices. German CPI rose by 7.9% in August on an annual scale and 0.3% on a monthly scale. While inflation in August did not change and stayed at the same level as in July, both monthly and annual scales were above expectations. Earlier, in Spain, which is currently the Eurozone's fourth-biggest economy, prices rose less than expected in the last month, by only 0.1%, to reduce the annual rate to 10.4% from 10.8%. The European Central Bank's governing council meets on Thursday, and we have to watch it more carefully and follow the reports about a possible 75 basis point increase in interest rates.
After published data, the euro rose almost 0.5% against the dollar to pass the critical pivot at $1.00. From the technical point of view, the price is returned above 20 DMA, while Stochastic also had its first bullish signal. 1.012 is the critical resistance, and bulls, to be able to continue the way, need to breathe above this level.
