EUR/USD holds steady after mild EU inflation data. FOMC minutes next
- The EUR/USD is holding steady after the relatively mild Eurozone consumer inflation data.
- The data showed that consumer prices rose by 1.6% in the Eurozone.
- The pair will next react to the upcoming FOMC minutes.
The EUR/USD pair is holding steady near the highest level since February 25 after the mild Eurozone consumer inflation data and ahead of the FOMC minutes. It is trading at 1.2220, which is 4.4% above the lowest level in April.
Eurozone consumer inflation
Consumer prices in the Eurozone made a modest recovery in April as the bloc extended its recovery. According to Eurostat, the headline consumer price index rose by 0.6% in April. This was in line with the preliminary reading that was published two weeks ago. The increase led to a year-on-year increase of 1.6%, higher than the previous 1.3%.
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In the same period, the core CPI rose by 0.5% in April, lower than the previous 1.0%. It led to an annualised increase of 0.7%, which was lower than the expected 0.8%. In the European Union, the headline CPI rose by 2.0%, in line with the European Central Bank (ECB) estimate.
Most countries in the EU recorded an annualised inflation that was above the Euro area average. This included countries like France, Germany, Spain, and Belgium.
Still, the data shows that the EU inflation is lagging that of other countries because of the recent lockdowns. For example, data published today revealed that the overall UK consumer price index rose by 1.5%, double where it was in the previous month. In the same period, the US consumer prices rose by 4.2%.
The EUR/USD will react mildly to the latest minutes by the Federal Reserve Open Market Committee (FOMC). The minutes will provide a detailed look at what the Fed members were thinking about when they made their decision. Still, the minutes will likely not have a major impact since Fed members have signalled that the bank will not move in the near term.
EUR/USD price action
The daily chart shows that the EUR/USD pair rose to a high of 1.2242 yesterday. This was a notable price action because the price struggled to break above this resistance several times before. The pair has also moved above the 25-day and 50-day moving averages. At the same time, the two lines of the MACD have moved above the neutral level, which is also a bullish factor. Therefore, the pair will likely keep rising ahead of the FOMC minutes.