When are Eurozone flash CPIs and how could they affect EUR/USD?

Eurozone CPI flash estimate Overview

Eurostat will publish the euro zone's inflation first estimate for July at 09.00GMT today. Consumer prices are expected to steady at 1.3% on a yearly basis, while the core figures are expected to come in at 1.1% in July, as compared to June’s 1.2%.

Deviation impact on EUR/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 40 pips in deviations up to 1.5 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 50 pips.

How could affect EUR/USD?

If the headline CPI numbers come in  weaker-than-expected, it would extend the correction in EUR/USD towards 1.1700 levels. On the other hand, an upside surprise in the core CPI figures could take the rate back towards multi-month tops of 1.1777 reached last week.

Technically, Haresh Menghani, Analyst at FXStreet noted: “With short-term technical indicators languishing around short-term overbought conditions, any disappointment from today's Euro-zone CPI release might prompt investors to take some profits off the table and drag the pair back towards its immediate support near mid-1.1600s. A follow through selling pressure has the potential to continue dragging the pair further towards the 1.1600 handle.” 

“On the flip side, bulls would be eyeing for a sustained break through the ascending trend-channel resistance near, currently mid-1.1700s, which if conquered should open room for extension of the pair's strong bullish momentum even beyond the 1.1800 handle towards its next resistance near 1.1830 region,” Haresh adds.

Key notes

Eurozone: Core and headline inflation to hold steady in July at 1.1% y/y and 1.3% y/y - TDS

Eurozone: Focus on inflation numbers – Danske Bank

About Eurozone CPI flash estimate

The Euro Zone CPI released by the Eurostat captures the changes in the price of goods and services. The CPI is a significant way to measure changes in purchasing trends and inflation in the Euro Zone. Generally, a high reading anticipates a hawkish attitude which will be positive (or bullish) for the EUR, while a low reading is seen as negative (or bearish).