04.05.201810:00 Forex Analysis & Reviews: Inflation in the euro area is still slowing down

In the morning, the weak inflation data did not come as a surprise to investors, which saved the European currency from a new wave of decline against the US dollar and a number of other world currencies. The report of the European Commission also did not affect the market.

According to the statistics agency, consumer prices in the euro area continued to show restrained growth, which puts the European Central Bank in another inconvenient position after a recent decision on interest rates.

Hence, the consumer price index in the eurozone rose by 1.2% in April this year compared to the same period last year after rising by 1.3% in March. As for core inflation excluding the volatile categories of goods, its growth was only 0.7% in April after rising by 1% in March this year.

As noted in the report, the main slowdown was in the growth rate of 1%, after a rise of 1.5% in March of this year.

In the report of the European Commission, there was also nothing unusual. According to the forecast of economists, the GDP growth of the eurozone in 2018 will be at the level of 2.3%, and 2% in 2019.

As for inflation, the European Commission still forecasts at 1.5% in 2018. Next year, the inflation is expected to be around 1.6%.

The main hope for a larger increase in inflation for the European Central Bank is the labor market. According to the forecasts of the European Commission, the unemployment rate in the eurozone will be 8.4% in 2018 against the November forecast of 8.5%. The European Commission also continues to forecast unemployment at 7.9% in 2019.

Today, a research company, IHS Markit, published a report saying that the increase in activity of the services sector in the U.K. accelerated in April this year, but it turned out to be worse than economists' forecasts.

According to the data, the index of supply managers for the U.K. services sector was 52.8 points against 51.7 points in March, while economists predicted that in April the index was 53.5 points.

Against the backdrop of such a report, traders were confused that left the GBPUSD pair in its place, in the area of monthly lows, after a two-week wave of decline. In the event that buyers of the pound could not do anything in the near future, the pressure will increase again, and a repeat support test of 1.3580 will lead to a new wave of trading instrument drop with renewal of lows of 1.3460 and 1.3400.