EUR/USD Nov. 12 – Fall Continues on GDP

EUR/USD lost another important support line and is looking for further losses, fueled also by weak GDP in Germany and France. Will the pair stabilize or continue downhill? Here’s a quick update on technicals, fundamentals and community trends.

Euro/Dollar under 1.3640

EUR/USD Technicals

• Asian session:  Fall continued below 1.37 and 1.3640
• Current Range between 1.3530 and 1.3640
• Further levels in both directions: Below 1.3530, 1.3430, 1.3334, 1.3267, 1.3114 and 1.2920.  Above  1.3640, 1.37, 1.3830,  1.3950, 1.4030, 1.4030, 1.4160, and 1.4217.
• 1.3334 significant lower point
• 1.37  significant higher point.

EUR/USD Fundamentals

All times are GMT. Most important events emphasized.

• 6:30 French GDP. Exp. +0.5%. Actual +0.4%. First disappointment.
• 7:00 German GDP. Exp. +0.8%. Actual +0.7%. Second disappointment.
• 9:00 Italian GDP. Exp. +0.4%.
• 10:00 All-European GDP. Exp. +0.4%.
• 13:35 US FOMC member Daniel Tarullo speaks.
• 14:55 US Consumer Sentiment. Exp. 69.1 points.

EUR/USD Sentiment

• Irish debt issues are becoming a problem once again, with Irish banks leading the pack. The gap between Irish and German bonds has widened. There are doubts on whether Ireland can pay its debt and which bailout is appropriate. This is the main driver of the Euro down.
• Talks about China limiting foreign activity sent the Shanghai stock exchange 5% lower, hurting the Euro as well.
• Bad European GDP just adds on to the Irish crisis.
• QE2 has a stronger effect on commodity currencies than the majors, although Europe begins to drag down everybody.
• G-20 statements will rock the markets. No significant agreement is expected, but any mention of currencies will move the markets. FX is high on the agenda.
• Currensee Community: 56% are long, 44% are short. These are 1151 open positions in real accounts trading this pair at the moment. Is the community seeing the dollar escape the bearish trend with QE2?

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