The Euro has made a solid start to the day against the greenback heading into Tuesday’s European session on the back of US dollar weakness across the board and the key for a continuation of the 3 day rally will be the release of the preliminary reading of the Consumer Price Index (CPI) figures from the Eurozone.
The European currency’s strong start to the week has been backed up by solid economic data such as yesterdays release of CPI figures from Germany which hit the market at 3.4% which was a marked improvement from last months figures of 3.1% and shows the improvement in consumer confidence is continuing after the effects of the coronavirus.
Today’s inflation figures will be of even more importance as it will give a picture on consumer spending from the Eurozone a whole and the figure expected is 1.5% which is more than double last month’s reading of 0,7%.
The EUR/USD currency pair may also see some movement with the release of the unemployment rate from Germany which is also expected to hit the market above expectations.
As mentioned in yesterday’s report, inflation figures from Germany would be key for the Euro to break higher and early in the European session today the EUR/USD currency pair has reached the next resistance level at $1.1830 where it is currently facing some difficulties.
Strong Eurozone CPI figures should see the pair break through the $1.1830 mark and head towards the next critical resistance level of $1.1860 which was last reached on the 8th of August.