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Forex: EUR/USD takes profits after German CPI

FXstreet.com (Barcelona) - The EUR/USD climbed the chart to 1.3116 high for the release of the German CPI report, and following figures revealing wider monthly contraction than expected, profit taking began, and extended after US personal income and spending data. At the moment of writing, the market trades at the 1.3080 area, around where it was held during the European session.

Both preliminary release of April German CPI (consensus of -0.1%) and HICP (consensus of -0.2%) fell -0.5%, which retraces the rise seen in March, of 0.5% and 0.4%, respectively. Annualized CPI eased from 1.4% to 1.2% and HICP from 1.8% to 1.1%.

US Core income disappointed at 0.2% in March, instead of 0.4%, and spending rose 0.2%, instead of 0.0% expected. The price of personal consumption expenditures fell -0.1% (MoM) to an annualized drop from 1.3% to 1.0%, as expected. Core prices came in at 0.0% (MoM) to an annualized drop from 1.3% to 1.1%, below consensus of 0.1% and 1.2%, respectively.

“Although the market is trying to move upwards, the main scenario still implies that the price may continue falling down to reach the target at 1.2940, or even lower, at 1.2880”, wrote Roboforex.com analyst Igor Sayadov, pointing then to a new ascending structure towards the level of 1.3200.

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