BREAKING: EURUSD hovers around 1.12 after German CPI data

Flash CPI data for September from Germany was released today at 1:00 pm BST. The report was expected to show a continued slowdown in annual CPI and a slight increase in prices on a monthly basis. The data confirmed a sharper slowdown than anticipated.

Germany's annual CPI for September slowed to 1.6% YoY, below the expected 1.7% YoY (down from (1.9% in August). On a monthly basis, CPI was flat, beating the expected rise of 0.1% (compared to a 0.1% MoM decrease in August). HICP data came as expected.

Despite the softer-than-expected inflation data, market reaction was muted. The EUR/USD is hovering around 1.12, which could act as resistance for any upward move. Additionally, Italian preliminary inflation data released earlier today also came in lower than expected on a monthly basis, further hinting at softening inflation across the Eurozone.

Germany, flash inflation data for September

• Annual CPI: 1.6% YoY vs 1.7% YoY expected (1.9% YoY previously)
• Monthly CPI: 0.0% MoM vs 0.1% MoM expected (-0.1% MoM previously)
• Annual HICP: 1.8% YoY vs 1.8% YoY expected (2.0% YoY previously)
• Monthly HICP: -0.1% MoM vs -0.1% MoM expected (-0.2% MoM previously)

Germany, state-level CPI readings for September

The reaction is muted. EUR/USD is hovering around 1.12, which could act as resistance for any upward move. On the 15-minute chart, the RSI is showing bullish divergence with higher highs and higher lows and is consolidating just below oversold levels. The MACD is close to establishing a buy signal on the 15-minute chart. Sourcs: xStation