Euro is lifted mildly by stronger than expectation German inflation data. But upside is capped by deteriorating confidence indicators. German CPI rose 0.5% mom in July, above expectation of 0.5% mom. Annually, CPI accelerated to 1.7% yoy, beat expectation of 1.5% yoy.
Eurozone economic confidence dropped to 102.7 in July, down from 103.3 but matched expectation. Industrial confidence dropped to -7.4, missed expectation of -6.7. Services confidence dropped to 10.6, missed expectation of 10.7. Consumer confidence was finalized at -6.6. Business climate indicator dropped to -0.12, missed expectation of 102.7.
EUR/USD’s recovery is rather weak and outlook remains unchanged. In case of another rise, upside should be limited well below 1.1282 resistance. Break of 1.1101 and sustained trading below 1.1107 key support will resume larger down trend from 1.2555.
