Trading Insights: Eurozone inflation data to drive EURO price action

Skilling Writers Team
2023-03-02
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Market Talk

Spain and Netherlands see inflation fall year on year, but for France, Ireland, and Germany inflation remains elevated

Spain and Netherlands see inflation fall year on year

Today’s Economic Events

Italy expected to see inflation drop from 10.7% to 9.4% y/y

Italy FTSE Mib Index has gained +13% since the start of 2023

Core Euro area inflation expected to remain flat at 5.3% while the headline inflation number is expected to fall slightly from 8.6% to 8.1%

The EURO has lost around -0.3% against the USD since the start of 2023

Time: GMT+0	Country/Region	Economic Indicator	Previous	Forecast	Actual	Units
10:00:00 AM	Italy	(inflation) HICP (p) m/m	-1.3	-0.3	-	%
10:00:00 AM	Italy	(inflation) HICP (p) y/y	10.7	9.4	-	%
10:00:00 AM	Euro area	(inflation) HICP (p) 'core' y/y	5.3	5.3	-	%
10:00:00 AM	Euro area	(inflation) HICP (p) y/y	8.6	8.1	-	%
10:00:00 AM	Euro area	Unemployment	6.6	6.6	-	%
1:30:00 PM	US	Initial Jobless Claims	192	-	-	-
1:30:00 PM	US	Continuing Claims	1654	-	-	-
3:30:00 PM	US	Natural Gas Stocks w/w	-71	-74	-	Bcf

Italy FTSE MIB year to date line chart

EUR/USD year to date line chart

Trading thoughts & commentary

Spain IBEX 35 Index current price seems to be consolidating year to date by +12.4% of gains; the index remains bullish although momentum indicators are slowing; provided price can hold above the 9,230 very short term support (5-13 days), a move to test the 9,370 resistance can not be ruled out.

EUR/JPY upside momentum remains; price faces resistance ahead near 145.8, a break above places 146.7 in sight; downside risk towards 143 provided the support at 144.5 fails to hold.

Gold: the recent USD strength keeps the downside pressure on gold price; new long positions could be waiting for price to cross back above its 50 day moving average before entering; if price can cross above key resistance spotted near $1,870 it places the round number $1,900 as a prospective upside target; short sellers may be seeking to take advantage of the prevailing downside momentum for a break below the $1,825 support for downside target near the round number $1,800 area and $1,790 (50% retracement from the September 28th 2022 - February 02 advance).