Forex Analysis & Reviews: 31.10.2019 - EUR/USD. Inflation in the...

Live Chat

InstaForex Loprais Team - Official participant of the Dakar rally

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

31.10.2019 03:29 PM

EUR/USD. Inflation in the European Union slowed to 0.7%, GDP – also decreased

Yesterday, the Federal Reserve announced its third consecutive key rate cut. Thus, the difference between the rates of the ECB and the Fed has decreased again, which gives some advantages to the European currency. However, this difference in the rigidity of the monetary policies of the European Union and America remains unequivocally in favor of the latter and favor of the US currency. Perhaps, now there are not enough fundamental reasons for the pair to update its lows every month, but this is also not enough for a confident strengthening of the euro currency. We even tend to believe that the euro/dollar pair in the coming months will be inclined to a wide "sideways" since now neither the Fed nor the ECB is no longer waiting for changes in monetary policy in the coming months. And the next meetings of the central banks will be held only in December.

Today, the euro could continue to grow if macroeconomic statistics from the European Union for the first time in a long time were encouraging, and start to fall, in the opposite case. As a result, the two most interesting reports turned out to be quite contradictory and can be interpreted as you like. Unexpectedly, for many, inflation accelerated in October (non-final value) to 1.1% y/y, but this is the so-called base value. "Normal" inflation, which everyone pays attention to in the first place, fell to 0.7% y/y. In the case of GDP in the third quarter, compared to the same period last year, the increase was 1.1% y/y, which is less than the previous value of +1.2%. In quarterly terms, the increase was +0.2% with a lower forecast of +1.1%. And both of these values are also preliminary. Thus, formally, we can state the continued deterioration of the macroeconomic indicators of the eurozone. And if so, then the chances of the euro currency to continue to grow against the US dollar are reduced again. In the afternoon, data on changes in the volume of spending and income of the American population for September will be published, but these indicators, like the Chicago PMI, are secondary.

For the euro, the level of 1.1180 (the previous local maximum) is now extremely important. If the bulls manage to overcome it, it will be a good help to continue the upward movement, which, however, again, is unlikely to continue for too long if traders are not supported by a positive fundamental background from Europe or a negative one from overseas. If the bulls fail to overcome this level, even from a technical point of view, it will be more preferable for the pair to move downward. Recall that most of the macroeconomic reports yesterday were ignored by the market, although overall macroeconomic statistics from the States yesterday was quite good. Thus, the reason for the pair's growth last night is only one – the Fed's rate cut. Now that the markets have worked out this information, it is time to return to the original trading strategy and the initial location of the pair. And this is being inside the Ichimoku cloud with the prospect of forming a downward trend. However, even if traders do return to this plan, we recommend to seriously consider selling the pair not earlier than crossing the Senkou Span B line.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.