Focus on German inflation – TDS

Analysts at TD Securities (TDS) offered a brief overview of Thursday's important release of the German Prelim consumer inflation and important technical levels for the EUR/USD major.

Key Quotes:

“We look for German inflation to nudge a bit higher to 1.0% y/y in November (mkt 1.1%), after two months with a 'zero-handle.' The only real source of upside pressure though is going to be base effects, after a very weak print for core CPI in November 2018 that will now drop out of the y/y calculation. So trends in German inflation are still quite soft, despite the unemployment rate sitting at all-time lows.”

“Markets should be rather quiet with the US out on holiday. We are, however, keeping an eye on EURUSD which temporarily slipped below 1.10 yesterday, following a solid spate of US data (including durable goods). With the Fed comfortably on hold and next week's calendar littered with top-tier data from the ISMs to payrolls, the USD may become more sensitive to data surprise momentum again. 1.0989 will be a notable interim pivot in EURUSD, ahead of the 1.0880/1.0925 support zone.”