Euro Inflation continuing to increase but Italy affecting sentiment

Euro Area Inflation Rate

Euro inflation has a rising trend although the last 12 months have been tumultuous.

Euro Area Inflation Rate
Trading Economics

The release is expected at 2.1 percent / 2.2 percent so a buy from trend lows is suitable.

Technical Analysis

 Chart Trend Direction Trend Break Zone 
 Day Down 120.60
Four Hour  Not set Not set
Thirty Minutes  Not set Not set


  • Low risk entry at: waiting on Four Hour and Thirty Minute trends to set
  • High risk entry at: 127.40

Fundamental and Geopolitical Analysis

“The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term.”

  • If inflation continues to heat up, interest rate hike will be brought forward
  • Italian borrowing costs are causing the budget to breach fiscal rules
  • EU economic forecasts are due on Monday

Sentiment Analysis

  • Traders are uneasy regarding Italy’s fiscal situation
  • Italian unemployment rate is closing in on 10%, release due Wednesday
  • The sentiment is not favorable of a purchase


Fundamentally, a buy from 127.40 makes sense but while the Italian situation has dovish sentiment it is not a good time to enter.


Photo by davide ragusa on Unsplash