Alfa Forex: EUR / USD – US inflation threatens euro growth


18 May 2021

The single currency is slowing down the upward dynamics when approaching the resistance at 1.2200. According to the April inflation report, consumer prices in the United States rose by as much as 1.6% y / y to 4.2%, and by 1.4% to 3% excluding fuel and food costs (CPI ex Food Energy). This gives a strong reason to doubt that the Fed will tighten monetary policy in the near future. So far, the financial authorities have not expressed their opinion on a possible increase in the key rate, but publicly declare that they are expecting a short-term surge in prices.

The EUR / USD pair has not yet been able to overcome the 1.2200 resistance to move to the 1.2350 annual highs. Support for the market is the psychological level of 1.2000 euros per dollar.

RUBLE – the national currency may continue to strengthen

The situation on the ruble instruments market is still stable: USD / RUB has maintained a trading range of 73.50-74.60 since the last weekly session, EUR / RUB is consolidating within 89.20-90.35. Market participants are leveling their positions after the May holidays, waiting for news from the external “front”, but for now there is a growing trend on the oil market and the geopolitical calm support the demand for the national currency. Another internal positive factor was added to the interest of Carry Trade investors: in March, Russia’s trade balance rose from $ 8.3 billion to $ 10.02 billion

The USD / RUB pair is trading below the resistance of 75.50 and retains the chances of advancing in the direction of support: the target is 72.70.

The EUR / RUB pair is holding below the psychological 90 rubles, maintaining the mood for a rush to the support of 88 rubles per euro. The main resistance is the level of 92 rubles per euro.

This information is not investment advice.

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