Forex Intraday Round-Up: EUR Falls Against USD on Mixed Data from the Eurozone

on Dec 21, 2012


The pair slipped from recent highs and fell below 1.3200 today, reaching an intraday low of 1.3180 and testing the level for most of the day before heading to a 1.3228 high on European opening flows.
Derek Halpenny, European Head of Global Market Research at the Bank of Tokyo Mitsubishi , opined for the that the markets have continued to trade more favourably ahead of the year’s end due to optimism over the Eurozone debt crisis reaching the highest it has ever been in 2012. According to him the main catalyst for the improved optimism is the European Central Bank’s Outright Monetary Transactions programme announced in September which reassured investors that EU policy makers are willing to do what’s necessary to keep the Eurozone together.

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At 12.30 GMT the single currency was changing deep in negative territory at 1.3207/11 or 0.27 percent lower than yesterday.
Olli Rehn, European Commissioner for Economic and Monetary Affairs, said today that more French deficit cuts are not essential but labour market pension reforms are necessary. Meanwhile Italian consumer confidence climbed from 84.8 to 85.7 in December, beating analysts’ estimates of 85.1. The German Gfk consumer confidence index eased from 5.8 to 5.6 in January, below forecasts of 5.9. As expected the French Business Climate improved from 88 to 89 in December.

The quoted BijoyKar, an analyst at MIG Bank, who expects support for the EUR/USD at 1.3144 and 1.3041. “The intraday bearish reversal made on 19 December close to the resistance at 1.3284 suggests a weakening short-term momentum” Mr Kar opined.
The British pound weakened against the dollar today and at 12.40 GMT it was trading at its intraday low of 1.6213. The GBP/USD fell after reports showed Britain’s economy expanded by less than previously estimated in the third quarter while the budget deficit widened. “The U.K. economy is still in a period of stagnation and the improvement in the third quarter is likely to be temporary,” opined Lee Hardman, a currency strategist at Bank of Tokyo Mitsubishi, as quoted by Bloomberg. “Recent long positions for the pound have been stretched and the currency may come under some pressure as investors adjust those into the year-end.”

!m[USD Strengthens against the GBP and CHF as US Budget Talks Remain Unproductive](/uploads/story/1086/thumbs/pic1_72_inline.png)
According to the newest data GDP rose 0.9 percent from the second quarter, down from a previous estimate of a 1 percent increase. The deficit excluding government support for banks was £17.5 billion compared with £16.3 billion a year earlier. Gfk’s Sentiment Index declined to -29 from -22 in November, which was the strongest reading in more than a year.

Slobodan Drvenica, an analyst at Windsor Brokers, points to support for the GBP/USD at 1.6236 followed by the psychological level of 1.6200 and 1.6188. In case of an upside movement resistance will be triggered at 1.6288, 1.6295 and finally 1.6308.
The dollar strengthened against the Swiss franc jumping higher during European trading after falling yesterday towards 0.9087. At 01.00 GMT the USD/CHF pairing was changing at 0.9143/44 or 0.31 percent higher than yesterday. Technically speaking the USD/CHF will encounter resistance at 0.9155 and the key barrier of 0.9200. On the decline support is expected at 0.9131, 0.9105 and finally 0.9081.


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