On Friday, the U.S. dollar was not very popular with traders, unlike the European currency. On the one hand, weak data on inflation in the euro area did not support risky assets, and, on the other hand, the publication of the Fed's report also did not add optimism to investors in the U.S. dollar.
According to the data, the Federal Reserve System will continue to gradually increase interest rates but will seek to keep them low. This is indicated in the semi-annual report of the Federal Reserve on Monetary Policy. Thus, expectation for a more drastic action from the regulator regarding rates in the near future will not be entirely correct. This was also hinted by representatives of the Fed during the talk on Friday night.
In the first half of the day, data was published that seemed to leave a good chance for euro growth during the day, but there was no increase in long positions in risk assets.
According to the data, Germany's budget surplus reached its maximum. This happened due to good economic growth and an excellent situation in the labor market. Thus, according to the National Bureau of Statistics, Germany's fiscal surplus in 2017 amounted to 37 billion euros, while the share of Germany's fiscal surplus from GDP remained at 1.1 percent. Germany's exports in the fourth quarter of 2017 increased by 2.7% compared with the third quarter, while imports increased by 2.0%.
Germany's GDP for the same period was not revised and remained at the level of 0.6 percent. Germany's economy grew by 2.9% year-on-year compared to 2016. These data fully coincided with the forecast of economists.
Data on inflation in the euro area did not have any impact on the market. According to the report, the consumer price index of the eurozone in January 2018 increased by 1.3% compared to the same period in 2017. Economists also expected an increase of 1.3%. Core inflation, particularly core CPI, in the euro area in January rose by only 1.0% compared with 2017.
As for the technical picture of the EUR/USD pair, it remained unchanged. Most likely, nothing serious at the beginning of the week will happen. To preserve the bullish mood in the trading instrument, buyers need to get out and gain a foothold above 1.2340, from where the highs of 1.2380 and 1.2410 will be available, which is the first goal of bulls in the middle of the week.
In case of EUR/USD pair decreases at the beginning of the week, active demand may begin after the update of intermediate support at 1.2280 or lower, at the higher levels of 1.2240 and 1.2200.