EUR/USD Slips on Weak Economic Outlook

EUR/USD had an interesting week as the battle between bulls and bears continue to intensify in the 1.29-1.31 zone. The pair topped out at 1.3170 level as negative news from the eurozone soured investors’ sentiment. The euro weakened after a report showed that lawmakers from Germany’s ruling coalition are planning to diminish the European Central Bank’s supervisory authority. In addition, Greek crisis waw back in focus as Greek Prime Minister Antonis Samaras struggled to convince his coalition partners on an €11.5 billion euro budget-cut package which is key to receiving international aid funds.
Meanwhile, several economic indicators paint a sobering picture of the global economy. Weak Chinese data and gloomy European economy renewed the anxiety and boosted the demand for safe-haven gold and yen. The biggest problems such as growth and unemployment remain unresolved in the eurozone.
This week the Japanese yen gained broadly after the Bank of Japan eased monetary policy but investors saw the announcement less aggressive than other central banks’ plans. The Bank of Japan announced that it expanded its asset-purchase target by ¥10 trillion to ¥55 trillion. The bank also decided to keep its policy rate at around 0% to 0.1%.
The Asian stock markets opened higher today. NIKKEI started the day at 9,113.30, previous close was 9,086.98. HANG SENG opened at 20,697.30, previous close was 20,590.90. Market analyst at IG Markets, Stan Shamu said “The general consensus at the moment is that any major dips in the market will be supported by the fact that central banks are happy to act”.
EUR/USD is trading at 1.2968 by the time of typing and for today resistances are located at 1.3027 and 1.3070. Support levels are 1.2935 and 1.2878.
GBP/USD is at 1.6227. Resistance levels are located at 1.6270 and 1.6300. Supports are located at 1.6170 and 1.6130.
USD/CHF is trading at 0.9327 by the time of typing and for today resistances are located at 0.9364 and 0.9395. Support levels are 0.9300 and 0.9267.
AUD/USD is trading at 1.0464. Resistances are located at 1.0497 and 1.0580. Support levels are 1.0425 and 1.0375.
The economic calendar is light today. UK Public Sector Net Borrowing numbers will be released at 09:30 GMT. Statistics Canada will release Core CPI data and Wholesale Sales figures at 13:30 GMT. Belgium NBB Business Climate report will be released at 14:00 GMT.