The European currency slightly recovered its positions against a number of world currencies, including the US dollar after the release of good data indicating that companies and consumers of the eurozone in September were more positive about their prospects.
According to the report of the European Commission, the sentiment index in the eurozone economy in September this year rose to 113.0 points against 111.9 points in August. Economists predicted a less rapid growth in the index.
Such a figure will provide good support to the economy of the euro area, which in the future will positively impact on attracting investments, as the confidence of companies will grow. The increase in household optimism will lead to an increase in their spending, which will also have a positive impact on economic performance.
The tightening of the euro-zone monetary policy will also have a positive effect on the exchange rate of the European currency. Let me remind you that this Monday, ECB President Mario Draghi said that the decision on interest rates will be made later this year.
Today, a report was published by leading German institutions, according to which the German economy will continue its growth at a faster pace than previously forecast. The report indicates that Germany's economic growth has intensified and has taken a more solid foundation.
Experts predict that in 2017 Germany's GDP will grow by 1.9%, whereas earlier it was expected to grow by only 1.5%.
In 2018, the institutes expect GDP growth of 2.0%, whereas earlier it was forecasted an increase in the economy by only 1.8%.
In 2019, GDP is expected to grow by 1.8%.
Preliminary data on inflation in Germany were less optimistic. According to the report, annual inflation in September did not change compared to August and amounted to 1.8%. Economists predicted its increase to 1.9%.
As before, the main driver of growth was energy prices, which in comparison with September 2016 in Germany increased by 2.7%. Food products went up by 3.6%.
As for the technical picture of the EUR/USD pair, further growth is limited by the intermediate resistance level of 1.1790, the breakthrough of which will lead to more noticeable demand for the European currency with the renewal of the level of 1.1830 and 1.1890 in the short term. If you do not get beyond the resistance level of 1.1790, then most likely the pressure on the euro will resume, which will lead to the return of the trading instrument to the lower border of the lateral channel 1.1720.
