The European currency ignored weak data on inflation in the eurozone, as well as the report on the German labor market, which turned out to be quite good overall.
In the first half of the day, a report on the preliminary consumer price index of France was also published which grew by only 0.02% in December compared to November as compared to the increase of 1.6% in the same period of 2017.
The preliminary annual consumer price index of France harmonized by EU standards reached the level of 1.9% in December against 2.2% in November.
Annual inflation in the eurozone dropped sharply in December last year. This happened against the background of a slowdown in the region's economy, which may affect the plans of the European Central Bank regarding interest rates.
Let me remind you that in December last year, the ECB completed a quantitative easing program, announcing that the target level of inflation has been achieved over the next few years.
As indicated in the report of the European Central Bank, the eurozone's CPI grew by only 1.6% in December 2018 compared with the same period of the previous year. In November, the growth was 1.9%. Economists expected a slowdown in consumer price growth to only 1.8% in December.
The main slowdown in inflation is also associated with a decrease in energy prices, which significantly subsided in the 4th quarter of last year. Excluding such volatile categories, the core inflation remained at 1.0%.
Today, a report in the Eurozone service industry was also published, where it was pointed out that growth was slowing. According to the data, the PMI Purchasing Managers Index for the Eurozone services sector fell to 51.2 points in December from 53.4 points in November. Economists expected a drop in the indicator to 51.4 points.
The only positive news that preserved confidence in the growth of the euro in the near future, was the report on the German labor market, showing its strength as the number of applications for unemployment benefits decreased, while the unemployment rate remained at a record minimum.
According to the Federal Employment Agency, the number of applications for unemployment benefits decreased by 14,000 in December of this year compared to November while economists expected a contraction of only 10,000. The unemployment in Germany remained at 5.0%.
As for the technical picture of the EUR/USD pair, it remained unchanged compared with the morning forecast. Only a break of 1.1420 resistance can lead to a larger uptrend, reaching the highs of 1.1450 and 1.1490. In the case of a downward correction, a good level for euro purchases will be the area of 1.1345.
The material has been provided by InstaForex Company -
www.instaforex.com