Topic: COZfx: No deflation in the Euro-zone but risks do persists
COZforex: For the past trading session, EUR rise 0.33% against the USD and closed at 1.3902, after an ECB Executive Board member, Benoit Coeure stated that he sees no signs of deflation in the Euro-zone economy at present. However, at the same time, he also cautioned that possible deflation risks still persists in the economy, adding that the central bank has number of instruments at its disposal to combat such risks.
Separately, another ECB policymaker, Peter Praet projected interest rates in the region to remain at current or lower levels even if economic conditions improve in the Euro-bloc. He further added that if the central bank opts for publishing ‘accounts’ of governing council minutes, then the need for forward guidance might be reduced in future.
Meanwhile, speaking at a conference in Madrid, Luis Linde, an ECB Governing Council member, hinted that a further appreciation in the Euro-zone’s common currency could call for an additional policy measures by the ECB.
In economic news, on a seasonally adjusted basis, industrial production in the Euro-zone unexpectedly declined 0.2% for a second straight month in January. Separately, non-farm payrolls in France registered a modest 0.1% rise in the fourth-quarter, following a 0.1% drop registered in the preceding quarter.
In technical analysis, COZforex foreign currency senior currency strategist, Paul Chew said, EUR/USD is predicted to find support at 1.3867 and a decline through could take it to the next support line of 1.3803. Meanwhile, the pair is predicted to find its first resistance at 1.3969, and a rise through could take it to the next resistance line of 1.4007.
Market participants are expected to keep a close tab on the release of the ECB monthly report, which would provide an insight on the prevailing economic situation in the Euro-zone.
(COZ forex UK)