Deflation in Europe | 02 Noviembre 2020

02 Noviembre 2020, EUR/USD

Deflation in Europe

EURUSD trading plan:

Negative macroeconomic statistics from the Euro area signal a continuation of the downtrend. Euro area annual inflation stable at -0.3%. Low prices for industrial goods and energy have a negative impact on inflation. Deflation is a bad signal for the European economy! This factor which leaves the monetary regulator no choice but to increase the purchases volume of eurozone countries government bonds in order to “accelerate” inflation in the medium term. The ECB will be forced to print a new euro portion and buy back government bonds. The ECB has a balance sheet of €6.78 trillion now. And this record level will soon be updated, which will negatively affect EURUSD.

Trading recommendation: Sell 1.1655 and take profit 1.1615

David Johnson
Analyst of «FreshForex» company
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