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13 Mar 2013
EUR/USD weighed by divergent economies
Today's data did nothing but highlight the divergences between the US and the eurozone economies. While the US reported much stronger than expected retail sales, the eurozone's industrial production report disappointed and Italy's debt auction didn't reach the targeted amount of bonds.
Against this backdrop, the US dollar rallied across the board and dragged EUR/USD to a fresh 3-month low of 1.2930, breaking below the 1.2950 level, which was a solid base that many analysts were pointing as a possible medium-term bottom.
EUR/USD loses the 1.2950 base
Technically speaking, the EUR/USD short-term indicators have regained bearish strength, while bigger time frames support the negative view. Having left the 1.2950 level behind, the 1.2900/08 area (psychological level/ Fib 76.4% of 1.2660/1.3710) stands as next bearish target ahead of 1.2880 (congestion area).
However, as indicators reach oversold levels, a bounce could not be dismissed, with 1.3080 (this week's top of range) as key area to regain in order to ease the immediate pressure. But only above the 1.3100/35 area, where the psychological hurdle, the 100-day SMA and last week's highs converge, would improve the technical outlook.
Against this backdrop, the US dollar rallied across the board and dragged EUR/USD to a fresh 3-month low of 1.2930, breaking below the 1.2950 level, which was a solid base that many analysts were pointing as a possible medium-term bottom.
EUR/USD loses the 1.2950 base
Technically speaking, the EUR/USD short-term indicators have regained bearish strength, while bigger time frames support the negative view. Having left the 1.2950 level behind, the 1.2900/08 area (psychological level/ Fib 76.4% of 1.2660/1.3710) stands as next bearish target ahead of 1.2880 (congestion area).
However, as indicators reach oversold levels, a bounce could not be dismissed, with 1.3080 (this week's top of range) as key area to regain in order to ease the immediate pressure. But only above the 1.3100/35 area, where the psychological hurdle, the 100-day SMA and last week's highs converge, would improve the technical outlook.