Yuriy Ukazkin
July's inflation data confirm the ECB's concerns that the Eurozone's economy is too weak to favor inflation. Still, some experts assume that the inflation in the currency union is not going to slow down any further while the pace of price growth is set to accelerate later on, thereby manifesting the effect of the central bank's monetary policy conducted in June.
According to Eurostat, the Eurozone's rate of inflation in July dropped from 0,5% down to 0,4%. This is the lowest level since fall 2009. Apparently, the latest inflation report failed to come up to expectations.
The recent inflation report followed the unprecedented package of quantitative easing measures by the ECB announced in June, Market Leader reports.
The rate of inflation hasn't exceeded 1% over the last 10 months. This is the halfway to the inflation target set by the European Central Bank. The inflation slowdown is taking place amid high unemployment and the escalation of the conflict in Ukraine and the relation between Ukrain and Russia coupled with the situation in the Middle East.
Still, experts assume that the ECB is not going to continue the quantitative easing program in the near future.
Meanwhile, even the IMF is sure that the Eurozone is likely to face stagnation triggered by a permanent deficit of domestic demand as the result of fewer credits, inadequate political decisions and the absence of structural reforms.
EURUSD
According to the experts working for Masterforex-V Academy, the common currency is still developing a long-term downtrend against tis American counterpart. Today, on August 4th, the currency pair is projecting another downswing represented by wave A/B of level Weekly. In particular, the price is building sub-wave 3/C within the scope of the mentioned downswing, Masterforex-V academy reports.
If there is a further price decline, the bears may see the price having a hard time overcoming the following levels of support: 1.3314, 1.3248, 1.3199 + 1.3104.
Alternatively, a break above the top of the MF sloping channel and the MF pivot at 1.3650 will end the mentioned bearish wave.
Yuriy Ukazkin
