The euro remained relatively stable on Friday, with EUR/USD trading at 1.0564, showing a slight increase of 0.09% during the European session. With no significant US events scheduled for the day and US markets closing early for the Thanksgiving holiday weekend, market activity may be subdued.
Eurozone inflation saw a notable rise, reaching 2.3% in November, up from 2% in October and in line with market expectations. Core inflation, which excludes volatile food and energy prices, remained steady at 2.7% year-on-year, slightly below the market forecast of 2.8%. Services inflation, on the other hand, increased to 3.9%, indicating persistent high levels.
However, on a monthly basis, inflation showed a decline in November, suggesting a possible trend of disinflation. Headline CPI fell by 0.3%, core CPI by 0.4%, and services inflation by 0.9%. These figures could influence the European Central Bank’s decision-making process, as they have already indicated a potential rate cut in December.
The recent PMI report revealed a contraction in the eurozone services sector for the first time in 10 months, indicating economic challenges. Additionally, German retail sales data for October pointed to weak consumer spending, with a 1.5% month-on-month decrease, below market expectations.
In terms of technical analysis, EUR/USD managed to surpass resistance levels at 1.0575 and 1.0595 before pulling back. The current support level lies at 1.0551, with the next support line at 1.0531.
The European Central Bank’s upcoming decisions, economic data releases, and global market trends will continue to impact the euro’s performance in the coming days. Investors and traders will closely monitor these developments to make informed decisions in the forex market.
