November 11th, Euro collapsed on US inflation data

On Wednesday, November 10, trading in the euro ended in a deep minus. The euro has fallen in price by 0.99%. up to 1.1478. The price collapsed in the American session after the publication of statistics showing a significant acceleration of inflation in the US in October.

In October, the consumer price index in the United States rose by 6.2% - a record value since November 1990. Compared to September, the rate of price growth accelerated by 0.8%, and core inflation, which does not take into account volatile energy and food prices, accelerated to 4.6% and also renewed its maximum in 30 years. US inflation is expected to continue to accelerate in the coming months on the back of housing, utilities, energy and car prices.

Experts attribute the reason for the strengthening of the dollar to an increase in the spread between US and German government bonds, as well as a revision of expectations for an increase in the US FRS rate. At such rates of inflation growth, the regulator may raise rates ahead of its own forecast.

Scheduled statistics (GMT +3):

• At 13:00, The monthly report of the ECB will be released at 12:00, and the ECB forecast.
• At 15:00, The monthly OPEC report will be released.
• At 15:15, ECB Executive Board Member Philip Lane will deliver a speech.
• Day off in the USA and Canada

Current situation:

The dollar and gold benefited from rising inflation in the US. Most of the major currencies are trading in the red. The Briton came out on top. For the Briton, the situation is ambiguous, so sales may resume with renewed vigor.

The UK plans to abandon parts of the agreement that regulate the free movement of goods between Northern Ireland and the UK. The EU has warned it is considering retaliatory measures, which could eventually include breaking the free trade agreement signed at the end of 2020. How Britain will behave is unknown. Disappointing UK GDP data limited the pound's upside potential.

The economic calendar is empty for today. Market participants are impressed by the published US inflation statistics. The market is pricing in an earlier increase in the US Federal Reserve rate.

In Germany, the number of cases of coronavirus has risen sharply, exceeding 50 thousand people in the last day - for the first time since the beginning of the pandemic. The tense situation with the coronavirus will put pressure on the euro, as Germany is likely to start introducing lockdowns again.

Technical analysis:

The euro fell to 1.1464. Australian and New Zealanders are falling in price for the third day in a row. Their weekly losses are 1.18% and 1.03%, respectively. For the euro, the level of 1.13 appeared on the radar (along the volume profile). On the hourly TF, the nearest support will be the zone 1.1435-1.1450. The yield on the 10-year bonds rose to 1.57% and continues to rise.

Summary: on Wednesday, the euro fell 0.99% against the dollar. up to 1.1478. The price collapsed in the American session after the publication of statistics showing a significant acceleration of inflation in the US in October. The yield on 10-year bonds is growing. In Germany, the number of cases of coronavirus has risen sharply. The dollar is strengthening throughout the market. The euro is expected to maintain its downward movement until the end of the week.

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