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EUR Trading Outlook
The Euro (EUR) the down trend continued with the major slipping below 1.2800 and staying under the figure for the rest of the trading day. EUR/JPY also continued lower with a test of Y98.50 at lows. The Euro weakness is broad with the EUR/GBP slipping to 0.8250 and EUR/AUD slipped under 1.2450. Looking ahead, Eurozone November Retail Sales forecast at -0.2% vs. 0.4% previously. German November Industrial Orders forecast at -1.7% vs. 5.2% previously.
The Euro (EUR) Debt concerns resurfaced after reports that Spain was looking for loans form the EFSF to recapitalize its banks. Also adding to the heavy selling EURO was the Italian Bank Unicredit which has looked to raise funds at a 43% discount from its current share price sparking a 15% slump in the stock yesterday. Looking ahead, October Industrial Orders forecast at +2.4% vs. -6.4% m/m previously.
The Euro (EUR) broke above 1.3000 with the change in sentiment clear from the start of the day in Asia. The market is still heavily short and good news has the chance to spark a relief rally with 1.3300 seen as a possible target for bulls in the short term. Ratings downside risks still remain but for now we will be looking to stocks markets and todays PMI data. Looking ahead, December PMI Services forecast at 52.7.
The Euro (EUR) the Euro kept to a 50 pip range with slow movement for most of the day. The ongoing Eurozone debt crisis is still the main story in the markets and more debt auctions this week could set the tone for the rest of the week and month. EUR/JPY broke below the key Y100 level as the USD/JPY slumped and is pulling the EUR/USD lower. Looking ahead, December Employment Change forecast at -10k vs. -20k previously. The Unemployment rate is forecast unchanged at 6.9%.
The euro edged lower today on the first trading day of 2012 and expected to remain under pressure weighed by the eurozone debt crisis. Investors are expecting to see whether this year will be the year when eurozone leaders work towards a fiscal integration or the year when we will see the more vulnerable countries having to leave the eurozone. Year-end trading kept volumes low but investors appear to be focusing on Europe as 10-year Italian bond yields remain above the 7%, a level seen as unsustainable raising more concerns about the country’s ability to raise funds. 2012 marks 10 years since Europe first held euro as a currency but this year could be the most severe test for the single currency. Versus the greenback, the single currency fell as low as 1.2921 from 1.2998 traded on Friday. Against the Japanese yen, the single currency hit a ten-year low at 99.33 weighed by then yen’s safe haven status amid this year’s global financial problems.
Go to Euro (EUR) Archive