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EUR/USD Ends Consolidation Period with Move Down

February 26, 2016 by

Today, EUR/USD has ended its short consolidation period with a sharp move down. The currency pair was hurt by weak inflation data released from countries of the eurozone and fell apart completely after the release of US economic indicators, basically all of which were very good. Of a particular note was the upward revision of gross domestic product.

US GDP grew 1.0% in Q4 2015 after expanding 2.0% in Q3 according the preliminary (second) estimate. Specialists had anticipated a downward revision to 0.4% from the advanced (first) reading of 0.7%. (Event A on the chart.)

Both personal income and spending increased in January. Income was up 0.5% compared to the average forecast of 0.4% and the December’s increase of 0.3%. Spending rose 0.5% as well versus the predicted 0.3% and the December’s 0.1%. Core PCE inflation was at 0.3% while experts had predicted it to stay at the prior month’s revised level of 0.1%. (Event B on the chart.)

Revised Michigan Sentiment Index was at 91.7 in February after registering a reading of 92.0 in January. The actual figure was better than the predicted 91.1 and the preliminary 90.7. (Event B on the chart.)

EUR/USD as of 2016-02-26

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