Data on inflation in Germany slightly pleased the traders, as they coincided with the forecasts of economists. On the other hand, the continued rise in inflationary pressures certainly pleased the European regulator.
According to the report, the final consumer price index of Germany in December 2017 increased by 0.6% compared to November and by 1.7% compared to the same period in 2016. The data fully coincided with the forecast.
The base index, which does not take into account the volatile categories, increased in December by 0.8% and by 1.6% compared to December 2016. As noted in the report, the acceleration of price increases was associated with higher energy and food prices.
The technical picture of significant changes was not sustained. The renewal of a larger support level in the EUR/USD pair around 1.2200 saved demand for risky assets, but it is only possible to talk about a return to the market of new large buyers after a steadying to 1.2250. Above this level, one can expect to update weekly highs and a breakthrough to the local level of 1.2345.
The British pound also fell against the US dollar, brushing off good inflation data in the UK.
According to the report, the annual inflation rate in the UK in the month of December slowed slightly, but the monthly momentum showed growth. According to the National Bureau of Statistics, in December 2017, compared with the same period in 2016, consumer prices in the UK rose by 3% after rising by 3.1% in November.
Compared to November 2017, the consumer price index rose by 0.4%, which fully coincided with the forecasts of economists. Selling prices of manufacturers increased by 3.3%, while purchasing prices of companies grew by only 4.9%.
The base consumer price index, which does not take into account the volatile categories, in December had increased by 0.3% compared to November and by 2.5% compared to the same period in 2016.
Good inflation figures are confirmed by the fact that in November of last year, the Bank of England hiked the interest rate, which was considered a right decision. The current target level for inflation remains about 2%.
As for the technical picture of the GBPUSD pair. In order to return the buyers to the market, it is necessary to consolidate above the resistance level of 1.3770, which will lead to a retest of weekly highs and a further release of the trading instrument to the area of 1.3900.
However, a larger demand for the pound may occur after a decline and the correction towards the levels of 1.3710 and 1.3650 in the first half of this week.