THE TAKEAWAY: Euro-zone unemployment remained at a record high in June -> Annual inflation continues at 1.6% -> Little Euro reaction-
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The Euro-zone unemployment rate remained unchanged at an all-time high for the fifth consecutive month, possibly supporting the claim that the economy has bottomed. The unemployment rate was reported at 12.1% for June, beating expectations for the rate to rise to 12.2%, as the rate for May was revised lower to 12.1%.
The Euro-zone consumer price index was reported 1.6% higher year over year for the second consecutive month, according to the Eurostat’s initial estimate for July. The annual inflation rate seems to have rebounded from a three year low rate at 1.2% set in April.
The ECB maintains a 2.0% inflation target and predicts 1.4% annual inflation for 2013. If unemployment starts to decline and annual inflation rises further, the combination of the improved economic indicator and higher prices may discourage the ECB from pursuing unconventional tools that President Draghi mentioned in June.
However, the Euro did not react significantly to the better than expected unemployment, possibly because it was unchanged from the revised prior month’s unemployment rate. EUR/USD may continue to see resistance by a monthly high set yesterday at 1.3302, and the broken resistance near 1.3200 may now provide support.
Forex trading today may remain focused on the upcoming FOMC decision scheduled during the North American session.
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EURUSDDaily: July 31, 2013
Chart created by Benjamin Spier using Marketscope 2.0
— Written by Benjamin Spier, DailyFX Research. Feedback can be sent to bbspier@fxcm.com .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.Learn forex trading with a free practice account and trading charts from FXCM.
Source: Daily fx
