Euro Zone Inflation Hits Highest Level in 2.5 Years, Fueled by Iran War

The decline in Eurozone inflation to 2.5% for the first time in two and a half years signals that the European Central Bank (ECB) may slow the pace of its interest rate hikes. This development could support global equity markets and increase the appetite for riskier assets. For the Turkish lira, a weaker euro may alleviate some pressure, but changes in global risk perception could lead to volatility in the markets.

EURUSD is trading sideways at 1.1710, with the RSI at 50 in neutral territory. The MACD remains below the signal line, indicating short-term weakness. The price is just below the 20- and 50-day moving averages, suggesting it is in a resistance zone. News headlines indicate rising inflation due to the Iran war, which could increase rate hike expectations in the Eurozone, but the war risk may negatively impact the EUR. In the short term, it is difficult to determine a clear direction, so I recommend a neutral outlook.

EURGBP is trading just above its 20- and 50-day moving averages, with the RSI at 51 in neutral territory. The MACD is above zero but very close to the signal line, indicating weak bullish momentum. News headlines note that Eurozone inflation has risen due to the impact of the Iran war, which could support the euro in the short term, but war risks create uncertainty. With technical indicators offering no clear direction, the market is expected to trade sideways over the next 1-3 days.

The DXY is trading at 98.70, with the RSI at 54, indicating neutral territory. Although the MACD line remains above the signal line, the gap is very narrow, suggesting weakening momentum. The index is above both the SMA20 and SMA50, supporting a short-term bullish bias. However, the upcoming Eurozone inflation data could introduce volatility in EUR/USD, indirectly affecting the DXY. Rising inflation due to the Iran conflict may weigh on the euro, potentially pushing the DXY higher. Given that current technical indicators do not provide a clear direction, a sideways movement is expected in the near term.