The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. A higher-than-expected reading should be taken as positive/bullish for the EUR, while a lower-than-expected reading should be taken as negative/bearish for the EUR.
Understanding the CPI Data
The Consumer Price Index (CPI) measures the change in the prices of goods and services contained in a basket of consumer items. The Central bank pays very close attention to this figure in its role of maintaining price stability.
A reading that is stronger than forecast is generally supportive (bullish) for the EUR, while a weaker than forecast reading is generally negative (bearish) for the EUR.
Anticipating Market Reaction
Investors are set to focus on the release of preliminary eurozone consumer inflation data for August, as the next policy-setting meeting of the European Central Bank draws nearer.
Data from Germany and Spain on Wednesday suggested that inflation was slowing at a disappointingly sluggish pace, and if this is matched in the eurozone as a whole it may force the European Central Bank to raise rates again in September.
The eurozone CPI is expected to rise 5.1% on an annual basis in August, a slight cooling from July’s 5.3%, but Wednesday’s data pointed to potential upside.
ECB President Christine Lagarde hinted that the region’s central bank will pause its rate-hiking cycle in September at the press conference that followed its last meeting.
And as per our prediction EURO CPI data will negative to EURUSD and will fall.
We have posted SELL EURUSD in our calendar signals at 5:30 GMT. https://t.me/calendarsignal/8900 and it also performed 1.092 – 1.088 = 40 PIPS GAIN
In conclusion, the release of CPI data today has the potential to impact the EUR/USD pair significantly. Traders and investors should closely monitor the figures. By staying informed and analyzing a comprehensive range of indicators, market participants can navigate the ever-changing landscape of the EUR/USD pair more effectively.