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French Auction Cannot Stop Drop – EUR/USD at 16 Month

France had an OK bond auction: it raised the amount of money it wanted, bid to cover ratios were OK and yields were very similar to ones seen in previous auctions.

However, this didn’t stop EUR/USD extends its drops and is at levels last seen at the beginning of September 2010.

France sold bonds maturing in 2021, but also 2023, 2035 and 2041. The long term 30 bonds saw a low yield of 3.97%, similar to the previous yield of 3.94%.

One  worrying  sign can be seen in the short term auction, where the bid to cover ratio was 1.64, much lower than 3.05 seen last time. Nevertheless, France sold almost 8 billion euros worth of debt at low prices.

The pair went as low as 1.2830 before bouncing, but only a bit. The 1.2873 was left behind after a first break below this line (at the last days of 2011) didn’t work out.

The next significant support line is only at 1.2720, with super strong support at 1.2587.

For more on the euro, see the euro/dollar forecast.

Euro-zone industrial orders rose by 1.8%, less than 2.4% that was expected. The Producer Price Index ticked by 0.1%.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.