Inflation in the Eurozone is starting to decrease again.

The euro has been continuously weakening due to pressure from the strengthening US dollar and expectations of slightly higher inflation rates in the coming weeks. Additionally, the global economy still indicates the possibility of further depreciation due to rising inflation and there are forecasts that growth in the eurozone may also slow down due to prolonged high interest rates.

The eurozone's inflation rate dropped to 4.3% year-on-year (YoY) in September, which was lower than the market's expectation of 4.5%. Inflation in the energy sector continues to decrease steadily. The core inflation rate also declined to 4.5%. When comparing inflation rates on a country-by-country basis, Germany, France, and the Netherlands experienced decreases of 4.3%, 5.6%, and -0.3%, respectively. However, Italy and Spain increases of 5.7% and 3.5%.

Nevertheless, both types of inflation rates remain higher than the European Central Bank's (ECB) target of 2%. It is notable that keeping interest rates unchanged for several months, along with the rapid rate hikes earlier this year, has effectively pressured inflation, although it has not yet reached the set target. The recent ECB meeting also indicated an intention to maintain interest rates in the near future.

The unemployment rate in the Eurozone has decreased to 6.4% in August, leading to a reduction in the number of unemployed individuals by 107,000 compared to the previous month, bringing the total number of unemployed to 10.856 million. The lowest unemployment rate is in Germany at 3%, while the highest is observed in Spain at 11.5%. The rising inflation in Spain is also a concern, and the increasing oil prices may further push up inflation in the country in the coming months.

The Eurozone's manufacturing Purchasing Managers' Index (PMI) slightly decreased to 43.4 in September. This decline is attributed to reduced new orders and the sharpest decline in hiring in nearly three years, despite a decrease in various raw material costs. Manufacturers in the Eurozone continue to focus on enhancing competitiveness, as reflected in the increasing exports.

The decrease in PMI data has had a minor impact on the Economic Sentiment Index in the Eurozone, which stands at 93.3 in September. Furthermore, the ECB's stringent policies continue to dampen confidence in companies' profit-making abilities. Additionally, the Consumer Price Inflation Expectations Index increased by 2.9 points to 12.0 in September, driven by higher prices for goods and services.

Techical analysis data (5H)

Resistance: 0.9552, 0.9561, 0.9578

Support: 0.9525, 0.9509, 0.9499

Source: Investing.com