The inflation psychology | 21 June 2022

21 June 2022, EUR/USD

EURUSD trading plan:

Record high euro zone inflation risked fuelling "inflation psychology," European Central Bank chief economist Philip Lane said. Once inflation psychology sets in, consumers bring forward their spending to beat the rise in prices while businesses start lifting their own prices, expecting higher costs, with both behaviours perpetuating inflation. "We have very high inflation rates now, and clearly we could be in a world where inflation psychology is taking hold," Lane told the annual dinner of Britain's Society of Professional Economists in London. This is a negative signal for the European currency.

Investment idea: sell 1.0545 and take profit 1.0461.

David Johnson
Analyst of «FreshForex» company
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