Rising Euro Lifts Sterling and Swiss Franc after German Inflation Data

Action Insight Mid-Day Report 3-30-23

Rising Euro Lifts Sterling and Swiss Franc after German Inflation Data

Euro is on the rise today, pulling Sterling and Swiss Franc along with it. Slightly higher-than-expected German inflation data is sparking speculation of a potential upside surprise in Eurozone CPI tomorrow. This development, coupled with recent hawkish rhetoric from ECB officials, suggests further tightening are on the horizon, provided banking troubles don't resurface.

Dollar and Yen are experiencing a broad sell-off. Although US benchmark treasury yields are rising amid stabilizing sentiment, they are clearly outpaced by their German and British counterparts. Commodity currencies are not seeing significant gains, despite overall sentiment, as BoC has already paused and both RBA and RBNZ are nearing a pause.

From a technical perspective, as Euro leads Sterling and Franc, focus is on 0.9995 resistance in EUR/CHF and 0.8864 resistance in EUR/GBP. Breaking these two levels will further strengthen EUR/USD's momentum through 1.0929 resistance towards 1.1032 high and increase the likelihood of breaking through this level to resume the larger uptrend.

In Europe, at the time of writing, FTSE is up 0.72%. DAX is up 0.93%. CAC is up 0.99%. Germany 10-year yield is up 0.047 at 2.374. UK 10-year gilt yield is up 0.047 at 3.518. Earlier in Asia, Nikkei dropped -0.36%. Hong Kong HSI rose 0.58%. China Shanghai SSE rose 0.65%. Singapore Strait Times dropped -0.16%. Japan 10-year JBG yield rose 0.0191 to 0.326.

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EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0818; (P) 1.0845; (R1) 1.0872; More...

Immediately focus is now on 1.0929 resistance in EUR/USD. Break there will resume the rally from 1.0515 to retest 1.1032 high. Decisive break there will resume larger up trend from 0.9534 to 1.1273 fibonacci level next. On the downside, though, break of 1.0711 will turn bias to the downside to extend the corrective pattern from 1.1032 with another decline.

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EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD

EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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Economic Calendar
GMT Ccy Events Actual Forecast Previous Revised
00:00 NZD ANZ Business Confidence Mar -43.4 -43.3
07:00 CHF KOF Leading Indicator Mar 98.2 100.5 98.9
08:00 EUR Italy Unemployment Feb 8.00% 8.00% 7.90% 8.00%
08:00 EUR ECB Economic Bulletin
09:00 EUR Eurozone Economic Sentiment Mar 99.3 99.7 99.7
09:00 EUR Eurozone Industrial Confidence Mar -0.2 0.9 0.5 0.4
09:00 EUR Eurozone Services Sentiment Mar 9.4 10.1 9.5
09:00 EUR Eurozone Consumer Confidence Mar F -19.2 -19.2 -19.2
12:00 EUR Germany CPI M/M Mar P 0.80% 0.70% 0.80%
12:00 EUR Germany CPI Y/Y Mar P 7.40% 7.30% 8.70%
12:30 USD Initial Jobless Claims (Mar 24) 198K 195K 191K
12:30 USD GDP Price Index Q4 F 3.90% 3.90% 3.90%
12:30 USD GDP Annualized Q4 F 2.60% 2.70% 2.70%
14:30 USD Natural Gas Storage -55B -72B