EURUSD World Bank expects a slowdown in the EU economy
EURUSD World Bank expects a slowdown in the EU economy. The European currency remains under pressure, and the EUR/USD pair trades unstably, correcting within a sideways trend around 1.1373.
According to the renewed January report of the World Bank, in 2022, the growth rate of the world economy will decline to 3.2% after growing by 4.1% in 2021. EU GDP growth forecast dropped from 4.4% to 4.2%, although in 2021, it climbed 5.1%. Among the main reasons for the negative dynamics, the bank calls the high degree of spread of the Omicron coronavirus strain and an increase in the growth rate of world inflation.
Data on the volume of industrial production in the EU will be published today. According to analysts, the indicator will decline to 0.6% from 3.3% a month earlier, putting additional pressure on the euro.
The USD Index declines, reaching the lower border of the global corridor at 95.500. Investors reacted negatively to the statement of the head of the US Federal Reserve Jerome Powell during a speech in Congress, who noted that high current inflation was a consequence of a disruption in supply chains that led to an imbalance in supply and demand, and this process would be regulated on its own. In these words, some experts caught the official’s reluctance to tighten monetary policy soon.
Support and resistance
On the global chart, the price moves within the local Flag trend continuation pattern, the implementation of which has not yet begun. The fluctuation range of the EMA on the Alligator indicator has narrowed almost completely, while the histogram of the AO oscillator remains close to the transition level.
Resistance levels: 1.1437, 1.1650.
Support levels: 1.1269, 1.1100.