EUR/USD: 1.2770The Euro acted pretty much as we hoped and made its way slowly higher to 1.2800(high 1.2801) today despite the Eurozone slipping into recession with a contraction in the Q3 GDP of -0.1%, which follows on from the previous quarter of -0.2%.
The bad news was not confined to Europe though, with US jobless claims jumping by 78k to 439k against expectations of 362k, with hurricane Sandy being largely blamed for the rise.
Technically we are trending very slowly higher from the recent 1.2660 low, although the move does look corrective and another leg lower would not surprise, but probably not before the weekend.
Immediately ahead, some more trade at around current levels looks probable. The hourlies are becoming a little overbought although the 4 hour charts are hinting at further mild upside pressure. I don't think we are going too far in any direction and it could be another tight session, but in the short term it could be the topside that comes under pressure.
Beyond 1.2800, 1.2838 (38.2% of 1.3171/1.2660) would be the first port of call, followed by the descending trendline, now at 1.2885.
A turn to the downside would see some minor bids at 1.2745 ahead of 1.2700 and then 1.2660. Below this, would head towards the 100 DMA, now at 1.2637, with the next support at around 1.2607 (50% of 1.2042/1.3171), but not today.
Given that there is very little data out today, it is looking like another rangebound session and I suspect 1.2730/1.28.30 will cover it.
