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7 Jan 2015
EUR/USD under pressure as deflation grips Eurozone
FXStreet (Mumbai) - The EUR/USD pair extended losses to trade well below the June 2010 low of 1.1875 after the official data in the Eurozone showed the currency bloc entered deflation for the first time since 2009.
The pair now trades 0.23% lower for the day at 1.1863 levels, after having clocked a low of 1.1847 immediately post the release of the CPI data. The single currency came under pressure after the data showed the December inflation rate in Eurozone dropped to -0.2% year-on-year versus the estimated fall of 0.1%. A weak CPI print puts more pressure on the European Central Bank (ECB) to ease more aggressively in order to achieve price stability.
However, the losses in the pair have been capped by a rise in Core inflation number. Year-on-year the Core inflation rose 0.8% in December, beating the estimate of 0.7%.
EUR/USD Technical Levels
The immediate support is seen at 1.1847, under which losses could be extended to the psychological support at 1.18. Meanwhile, resistance is seen at 1.1875 (June 2010 low), above which the pair could rise to 1.1925 levels.
The pair now trades 0.23% lower for the day at 1.1863 levels, after having clocked a low of 1.1847 immediately post the release of the CPI data. The single currency came under pressure after the data showed the December inflation rate in Eurozone dropped to -0.2% year-on-year versus the estimated fall of 0.1%. A weak CPI print puts more pressure on the European Central Bank (ECB) to ease more aggressively in order to achieve price stability.
However, the losses in the pair have been capped by a rise in Core inflation number. Year-on-year the Core inflation rose 0.8% in December, beating the estimate of 0.7%.
EUR/USD Technical Levels
The immediate support is seen at 1.1847, under which losses could be extended to the psychological support at 1.18. Meanwhile, resistance is seen at 1.1875 (June 2010 low), above which the pair could rise to 1.1925 levels.