Commentary:
There is a collection of important economic figures which will be released today across Europe, and they are expected to have a significant impact on the markets; German ZEW Economic Sentiment is expected to come in at -11.8 vs. -21.6, EU ZEW Economic Sentiment is expected to come in at -21.1 vs. -32.5, and finally EU Industrial Production is expected to weaken further to -1.1% vs. -0.1%.
EUR/USD: Moody’s credit agency once again stepped into the markets after the closing bell of the US session yesterday and changed the outlook of nine euro nations, which led to another fall in the EUR/USD during the Asian session. Technical indicators remain negative again and are showing signs that the general downtrend has resumed, stochastic oscillator remains negative as it crossed over to the downside and trading well below 80%, and RSI is also negative and remains below 70%, near 50% barrier. The next obstacle support is around 1.3050 for now.
German ZEW Economic Sentiment: A leading indicator for the economic health that is based on surveyed German institutional investors and analysts.
EU ZEW Economic Sentiment: The same as the German index, but it’s based on surveyed euro zone institutional investors and analysts.
Industrial Production: A leading indicator that measures the change in the total value of produced goods during the reported month by percentage.
United Kingdom
Commentary: Another big day ahead for the British economy as the markets will be waiting for Consumer Price Index, which is expected to ease back to 3.6% vs. 4.2% YoY, Core CPI is also expected to slip back to 2.7% vs. 3.0%, and finally the markets will be focusing on the Bank of England Inflation Letter, which will have a significant impact on the markets.
GBP/USD: Moody’s Credit Agency affirmed AAA rating for the United Kingdom, but revised its outlook to negative from stable, which led to a drop in GBP/USD during the Asian session, reaching as low as 1.5684 so far. Technical indicators are showing that the downtrend has resumed, stochastic oscillator crossed over to the downside, and RSI is negative again. The next obstacle support is around 1.5660’s.
Consumer Price Index: A leading inflationary indicator that measures the change in the price of goods and services purchased by consumers during the reported month. The index has a significant impact on monthly basis, while annual basis usually has a slight impact depending on the CPI change.
Core Consumer Price Index: The same as the Consumer Price Index, but this index measures the change in the prices of goods and services excluding core goods, such as food, energy, tobacco and alcohol.
Bank of England Inflation Letter: The Bank of England Governor is required to write an open letter to the Chancellor of the Exchequer explaining the reasons why the Consumer Price Index YoY edged higher by more than 1% from the target rate of the Bank of England at 2%.