When is German prelim CPI and how could it affect EUR/USD?

German prelim CPI Overview

The German inflation data is up for release later this session at 1200GMT, with the CPI figures expected to tick lower to 0.1% m/m in August, while edging higher to 1.7% annually, compared to the 1.5% result reported in July.

Germany's regional CPIs released earlier today outlined a bleak picture of the harmonized German CPI report due to be reported shortly. Brandenburg inflation for the month of August MoM came in at +0.1% versus +0.4% prev. In Hesse, MoM arrived at +0.0%, versus +0.4% prev. Meanwhile, in Bavaria MoM also ticked lower to +0.2%, versus +0.4% last. In Saxony, August inflation MoM came in at +0.2% versus +0.3% previous. 

How could it affect EUR/USD?

On an upside surprise, we could see the EUR/USD pair head back towards 1.2000 levels, which could open doors for a test of 1.2050 (psychological levels) en route 1.2069 levels (2-1/2 year tops). On the flip side, if the readings come in worse-than markets’ expectations, the rate could accelerate its decline further towards 1.19 handle, below which a test of 1.1873/71 (classic S2/ 10-DMA) is imminent, paving the way towards 1.1820 (20-DMA).

Key notes

Germany: HICP to pick up from 1.5% to 1.8% y/y in August - TDS

German Prelim CPI preview - HSBC

About German prelim CPI

The Germany consumer price index released by the Statistisches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends. A high reading is positive (or Bullish) for the EUR, while a low reading is negative (or bearish).