briefly rose above the immediate resistance at the early-October high at parity last week, coinciding with the upper edge of a falling channel from April and giving the impression that the rebound could extend. However, it would be too soon to conclude that a valid resistance break has occurred, because the price has fallen back below parity and is slipping lower today, despite the higher consumer inflation CPI report, while the GDP also came better, beating expectations in Q3 and Q2 being revised higher.

EUR/USD H4 Chart – Will the 50 SMA Hold?

Eurozone October CPI Inflation Report:

• October CPI MoM Flash 1.5% vs 1.2% forecasted
• September CPI MoM was 1.2%
• Flash CPI YoY 10.7% vs 10.3% forecasted,
• Previous CPI YoY was 9.9%

Reuters Note 

Consumer price growth in the 19 countries sharing the euro accelerated to 10.7% in October from 9.9% a month earlier, beating expectations in a Reuters poll for 10.2% as inflation in Germany, Italy and France all rose more than forecast, data from Eurostat, showed on Monday.

Energy prices continued to drive inflation but food and imported industrial goods all pushed prices sharply higher even as services played only a marginal role this time.

The ECB has raised rates a combined 200 basis points in the past three months and promised further tightening as soon as December. But markets have started to anticipate a slowdown in rate hikes as a recession looms and gas prices have come down from record highs.

But policymakers are likely to be concerned that underlying price growth, which filters out volatile food and fuel prices, continued to accelerate, pointing to broadening price pressures, which raises the risk that high inflation will get entrenched.

EUR/USD Live Chart