The Euro consolidated against the greenback on Friday after the release of upbeat Eurozone industrial production data for August. The consolidation was also aided by weaker-than-anticipated University of Michigan consumer sentiment data for October. Overall, the EUR/USD pair traded between 1.0495 and 1.0560 on the final trading day of last week.
According to the final data published by the National Institute of Statistics and Economic Studies (INSEE), the French consumer price index fell by 0.50% m-o-m in September, following a 1% increase in August. The initial estimates had forecast a decline of 0.50%. Economists did not anticipate any change in the preliminary reading.
The service prices fell by 1.60% m-o-m in September, following a 0.10% increase in the previous month. Likewise, transports recorded a decrease of 11.60% while accommodation services posted a decline of 15.80%. Food prices inched down 0.30% in September.
However, the price of energy rose by 2% in September. Similarly, petroleum products posted an increase of 3.20% and electricity recorded a growth of 1.10%. Manufactured products inched up 0.70%.
On a y-o-y basis, consumer prices grew by 4.90% in September 2023. Energy prices jumped 11.90% y-o-y in September. Also, food prices increased 9.70%. While services inched up by 2.90%, manufactured products grew by 2.80%.
Furthermore, annual core inflation stood almost unchanged at 4.60% in September 2023.
According to Eurostat, Eurozone industrial production rebounded with a growth of 0.60% m-o-m in August after a 1.30% decrease in the previous month and surpassed forecasts of 0.10% growth.
The durable consumer goods production grew by 1.20% m-o-m in August. Likewise, non-durable consumer goods inched up 0.50%. Capital goods rose by 0.30%. However, intermediate goods production declined by 0.30%. Similarly, energy production fell by 0.90%.
On a y-o-y basis, industrial production declined 5.10% in August 2023. The decline was led by a 7.20% fall in the production of durable consumer goods. Capital goods decreased by 7%, while energy fell by 6.30%. The production of intermediate goods and non-durable consumer goods decreased by 5.20% and 1.40%, respectively.
In the US, the University of Michigan consumer sentiment index declined to 63 in October from 68.10 in September and missed forecasts of 67.20.
The current economic conditions index declined to a five-month low of 63 in October from 68.10 in September. Likewise, consumers’ future expectations fell to 60.70, the lowest reading in five months, from 66. The year-ahead inflation forecasts grew to 3.80% in October, the highest reading since May 2023, from 3.20% in September. Additionally, the five-year outlook rose to 3% from 2.80%.
The better-than-anticipated Eurozone industrial production data is expected to turn the EUR/USD pair slightly bullish in the near term.
The historical price chart indicates that the EUR/USD pair is trading near support at 1.0490. The next resistance is anticipated only near 1.0760. Additionally, the stochastic indicator is in the oversold region. Therefore, we anticipate the EUR/USD pair to strengthen in the days ahead.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
