March 28, 2013 in Forex Analysis
Economic news (28 March 2013) – The euro declined sharply again in early London trading, after managing to slightly recover overnight, following Wednesday’s four-month low against the dollar. During Thursday’s early session, the single currency quickly dropped below $1.28, soon after data showed the number of German unemployed people has increased by 13K. However, the report on the Business Confidence in Italy, released shortly after that, gave support to the euro, and it was trading at 1.2812 against the dollar.
The single currency came under huge pressure this week amid financial turmoil inCyprus, renewed political uncertainty inItaly, and negative economic data from the Eurozone.
The Italian bond auction yesterday added more fuel to the situation, as borrowing costs increased to a five-month peak due to investors’ demand for a higher risk premium, given the political insecurity.
Across theAtlantic, the seasonally adjusted pending home sales index for February fell by 0.4% to a reading of 104.8, worse than a forecast for a 0.2% drop.
According to analysts, the euro is currently in a shaky position on the charts, amid the latest jitters in the Eurozone, and its movement is very responsive to any type of economic data.
At yesterday’s session the euro fell sharply from 1.2860 to 1.2750. This morning the currency pair was trading at 1.2765-1.2800.
Should the euro overcome the resistance zone at 1.2780-1.2810, its aim will be reaching and testing the 1.2835-1.2850 zone. If successful, the upward trend will continue to 1.2880-1.2910. If the euro falls below the 1.2770-1.2750 support zone, the next support is expected to be at the 1.2730-1.2715 area. In case of a breakdown, the downward trend will continue to 1.2700-1.2675.
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