Global macro overview for 16/12/2016:
The November 2016 Eurozone CPI final data were released today and they coincided with flash estimates. The Consumer Price Index was released at the level of 0.6%, just as a month ago. The reading came in as expected and the Consumer Price Index Core was released at the level of 0.8%, just as a month ago and as expected. The data indicate that the biggest inflation increase can be noticed in food (processed and unprocessed) alcohol, and tobacco. The biggest decrease in inflation can be noted in services and energy. In conclusion, data just in line with expectations means an early Christmas gift for Mario Draghi as any increase in inflation is very much welcome by ECB policy makers.
Let’s now take a look at EUR/USD technical picture in the 4H time frame. The market is trying to bounce from the intraday support at the level of 1.0370, but bulls don’t look strong at the moment. The important intraday resistance at the level of 1.0505 hasn’t been challenged yet and this is the key level to the upside. No bullish divergence yet present as well. The bears are in full control over this market.
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