The euro area inflation rate increased towards 8.1% in May to new record highs above market forecasts of 7.7%. The higher energy prices continue to boost the rate which stands around 39.2% vs 37.5% in April – followed by food, alcohol, and tobacco with 7.5% vs 6.3%. The rate is well above the ECB’s target of 2% and strengthening clues about raising interest rates which may be able to lift the value of the euro higher as well. Forecasts point to ease of the inflation which stands above the standard deviation’s value area of the mean.

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Inflation Rate with lower forecast on standard deviation value area of the mean.

The euro fell by about 0.8% against the dollar with the higher inflation rate, which pressured the rate lower towards the swing lows and lower extreme of the previous week’s value close area. The rate might be able to find euro buyers around the prior VWAP close levels as the macro view supports the monthly lower bracket extreme while the rate is trending lower for about nine months, pressured by the surging prices.

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Euro buyers might be found around the swing lows and the previous week’s lower value extreme.