EUR/USD: Euro weakened on poor GDP data in Europe; trading tad ...

GCI Forex News - EUR/USD: Euro weakened on poor GDP data in Europe; trading tad higher this morning

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EURUSD Movement

For the 24 hours to 23:00 GMT, EUR declined 0.71% against the USD and closed at 1.3349, as investors fretted over downbeat European gross domestic product data.

In the Euro-zone, the seasonally adjusted gross domestic product (GDP) contracted 0.6% (QoQ) in the Q4 FY2012, compared to a 0.1% decline in the previous quarter. Market had expected GDP to contract 0.4%. Meanwhile, German GDP eased 0.6% in the Q4 FY2012, against the expected 0.5% drop, while French GDP fell 0.3% in the Q4 FY2012, wider that the expected 0.2% drop. Additionally, Italian GDP contracted 0.9% in the Q4 FY2012, against the expected 0.6% drop.

Adding to the negative tone, the European Central Bank (ECB), in its latest survey, indicated that Euro-zone economic activity is expected to be flat in 2013, down from a previous prediction of 0.3% growth, made three months ago. However growth in the single bloc is subsequently expected to rise to 1.1% in 2014, down from a previous forecast of 1.3%, before accelerating to 1.6% in 2015.

Meanwhile, in the US, the Senate Democrats proposed a $110.0 billion tax increase and spending cut plan that would postpone $1.2 trillion of automatic spending cuts set to begin from 1 March 2013 by ten months.

Separately, initial jobless claims in the US fell by 27,000 to a seasonally adjusted 341,000 in the week ended 9 February 2013, from an upwardly revised 368,000 recorded in the prior week. Market had expected initial jobless claims to drop to 360,000 during the last week .

In the Asian session, at GMT0400, the pair is trading at 1.3355, with the EUR trading marginally higher from yesterday?s close.

The pair is expected to find support at 1.3297, and a fall through could take it to the next support level of 1.3239. The pair is expected to find its first resistance at 1.3431, and a rise through could take it to the next resistance level of 1.3507.

Euro-zone?s trade balance data is keenly eyed by investors, while Spanish CPI and Italian trade balance are also scheduled for release later today.

The currency pair is trading between its 20 Hr and 50 Hr moving averages.

Source: http://forexnews.gcitrading.com/currencies/eurusd/eurusd-euro-weakened-on-poor-gdp-data-in-europe-trading-tad-higher-this-morning.htm

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