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COZfx: Greenback extends its fall following lacklustre US GD

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COZfx: Greenback extends its fall following lacklustre US GD

Postby dwang » Fri Jun 27, 2014 3:14 am

COZforex: For the past trading session, the EUR rise 0.18% against the USD and closed at 1.3630, as demand for the greenback dropped following the latest batch of soft economic releases from the US economy. Revised data showed that the US economy shrank at an annualised rate of 2.9% in the first quarter of 2014, its worst performance in 5 years while another report revealed that US durable goods orders unexpectedly dropped by a seasonally adjusted 1.0% in May for the first time in four months. However, Markit PMI for the US service sector rise more-than-expected to a reading of 61.2 in June from previous month’s level of 58.1. Meanwhile, amid his speech at a conference in Boston, Fed Governor, Daniel Tarullo, cautioned the US banks of a tougher stress test.

In the Euro-zone, an ECB Governing Council member, Luis Maria Linde, hinted that the central bank was mulling an asset-purchase programme in the Euro-zone economy, despite knowing that financial markets in the region remained fragmented. However, another ECB policymaker, Jens Weidmann, urged the ECB to refrain from its plans to purchase securitised debt, as he felt that such a move by the central bank could turn it into “the bad bank of Europe by taking risks off banks and passing them onto the taxpayer.”

Meanwhile, French national statistics bureau, Insee, projected the domestic economy to expand 0.7% in 2014, which failed to meet President, Francois Hollande’s government’s expectations for a 1.0% growth this year. In addition, Insee forecasted jobless rate in Euro-zone’s second largest economy to edge up to 10.2% in the second quarter from 10.1% in the first quarter.

In technical analysis, COZFX strategist Nigel Boynton said, GBP/USD is predicted to find support at 1.3605 and a drop through could take it to the next support line of 1.3576. Meanwhile, the pair is predicted to find its first resistance at 1.3657, and a rise through could take it to the next resistance line of 1.3680.

During a lack of major economic releases in the Euro-zone economy, traders would eye global economic news, along with weekly US jobless claims data, for further cues in the currency pair.

(COZ forex UK)
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