The German prelim CPI Overview

The German inflation data is up for release later this session at 1300GMT, with the CPI figures expected to rebound to +0.6% m/m in February, while easing 1.3% annually, compared to the 1.4% result reported in January.

Germany’s regional CPIs released earlier today point to an optimistic outcome of the harmonized German CPI report due to be reported later today. North Rhine Westphalia inflation for the month of February MoM came in at +0.5% versus -0.6% prev. In Hesse, MoM arrived at +0.4%, versus -0.8% prev. Meanwhile, in Bavaria MoM also ticked higher to +0.5%, versus -0.7% last. In Saxony, February inflation MoM stood at +0.4% versus -0.8% previous, while Baden-Wuerttemberg’s came in at MoM +0.5% vs. -0.7% prior.

How could it affect EUR/USD?

According to Valeria Bednarik, Chief Analyst at FXStreet, “technically, the pair is neutral-to-bullish, holding within messy moving averages in the 4 hours chart, capped by the 100 SMA today around 1.2345, but above the 20 SMA that slowly grind higher. In the same chart, technical indicators hold within positive territory, but lack directional strength, as investors hesitate ahead of Powell. Beyond the mentioned 100 SMA, chances are of further gains, with 1.2380 and the 1.2420 price zone as the next possible bullish targets.  Below 1.2300, supports come at 1.2260, and 1.2205.”

Key Notes

Germany: Inflation to remain unchanged at 1.4% y/y in February – TDS

European FX Outlook: Jerome Powell delivers his first Congressional testimony

About the German Prelim CPI

The Germany consumer price index released by the Statistisches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends. A high reading is positive (or Bullish) for the EUR, while a low reading is negative (or bearish).