18.01.201801:46 Forex Analysis & Reviews: Correction for the euro can continue

Just like yesterday, in the first half of the day, buyers of the European currency once again ignored a fairly good report on inflation in the eurozone. Most likely, the restrained demand for the euro is due to the fact that the data fully coincided with the forecasts of economists, while the recent statements of the official of the European Central Bank are still "fresh in the memory" of investors.

This, of course, talking about today's Asian speech Vice-President of the ECB Vitor Constancio, who in his interview stated that the soft monetary policy will continue, despite the reduction in purchases of bonds by the central bank. After these statements, the pressure on the European currency has grown significantly and is still present at the moment.

It should be noted that such statements are far from news for the market. In his speech at the end of this year, after the central bank's ECB press conference, Mario Draghi also drew attention to the fact that a complete rejection of the policy of repurchasing bonds does not mean a rapid increase in interest rates in the eurozone.

Whether today's statements of Vitor Constancio are connected with rumors about verbal interventions by the ECB that were reported last week is not yet clear, but the proper effect on the depreciation of the European currency was achieved.

As for the data on inflation, according to the statistics agency, the eurozone CPI index rose in December 2017. So, the consumer price index of the eurozone at the end of last year increased by 0.4% compared to November and by 1.4% compared to the same period in 2016.

The basic consumer price index, which does not take into account the volatile categories of goods, in December increased by 0.5% and by 0.9% compared to December 2016. Without taking into account tobacco products, the consumer price index of the eurozone grew by 0.4% and 1.3%, respectively, which fully coincided with the forecasts of experts.

As for the technical picture in the short term, much now is tied to support of 1.2200, and its breakthrough will lead to a larger selling of risk assets with the update 1.2150 and 1.2120.

Speech by the President of the Federal Reserve Bank of Dallas Robert Kaplan supported the US dollar. The representative of the Federal Reserve said that he expects three increases in the key interest rate this year, but does not exclude a larger number. This can be done in order to prevent overheating of the economy, which is gradually gaining strength.