EUR/USD: 1.3150It has been very much a session of cutting risk positions following the lower than expected Chinese GDP, which came in at 7.7% (exp 8.0%). Gold has had its worst 2 days, apparently in 30 years, and has dragged anything remotely considered to be a risk asset down with it.
The Euro is a bit lower, pressured partly by selling in Eur/Jpy, but has escaped relatively unscathed against the Dollar, which itself must be incredibly weak, given the lack of any real rally following the absolute wipeout in the commodity markets.
Earlier in the day, the data from the EU showed that the Trade Balance for Feb was +10.4 bio (exp +3 bio), after Jan was revised down to -4.7 bio from -3.9 bio, but the Euro was really pretty much sidelined while the action took place elsewhere.
Technically, little has changed for the Euro against the Dollar and similar chart points remain the ones to watch as were discussed on the weekend.
On the topside, 1.3112 (38.2% of 1.3710/1.2745) remains the initial hurdle ahead of the 100 DMA (1.3130), which remains strong and may well go untouched in the coming session. If we do break above last week's 1.3138 high we should then head towards 1.3162 (28 Feb high), 1.3200 and then 1.3226 (50% Fibo of 1.3710/1.2745). Right now this looks rather unlikely.
On the downside, we have been down 1.3020 which is minor support ahead of 1.3000. Below there would take us back to 1.2985 (23.6% of 1.2744/1.3137) and then to 1.2940(50% of 1.2745/1.3137. Below there would head to 1.2900/15 where the April 5 low & the 200 DMA currently resides.
The short term charts are beginning to look weaker than I might have expected at this time yesterday and it looks as though a break of 1.3020 may actually begin to accelerate the downside towards 1.2940. As long as today's low holds, we may head back towards 1.3100 and overall the market has its focus elsewhere today, but the short term momentum indicators are heading lower and I think 12950 may not be too far away.
Today will be driven again largely by Yen flows and risk sentiment but there is a fair bit of data out as well, headed by the ZEW survey, so it could be a busy session.
Economic data highlights will include:
EU CPI, ZEW Economic Sentiment Survey, US CPI, Industrial Production, Capacity Utilization, Building Permits
