FX News - Feb 26 2014: EUR/USD Drops Post-Gfk Consumer Confidence

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The EUR/USD pair went off to a pretty rough start at the opening of the European session, despite the positive Gfk Consumer Confidence Survey for March. The figure turned out at 8.5, which was higher than the expected 8.2 and the previous period’s 8.3. However, this wasn’t enough for the market, as the pair experienced a sharp decline under the 1.3736 area. The trend was short-lived, as the pair made a swift recovery, and is currently trading at 1.3754. Initial resistance for the pair is at 1.3780, followed by 1.3814. Meanwhile, initial support is at 1.3727, followed by 1.3693.

Earlier during the Asian session, Australia posted a weaker-than-expected Construction Work Done data for Q4 2013. It contracted by 1.0%, instead of a projected 0.7% growth. The previous quarter’s figure was at 3.0%. This led to a steep drop in the value of the AUD/USD, which opened at 0.9010, but fell to a low of 0.8969. However, it gradually managed to erase the losses as the day progressed. It peaked at 0.9025 before the opening of the European session when the Bank of China gave a statement that its property financing business is stable. Trouble from China is far from over, however, since it cut its CNY fixing rate, and the decline in iron ore prices, which hit a seven-month low.

The AUD/USD pair is currently trading at 0.9013, with initial resistance seen at 0.9030, followed by 0.9052. Meanwhile, initial support is at 0.8987, followed by 0.8964.

The United Kingdom is set to release its Gross Domestic Product (GDP) figures any moment now so expect a flurry of activity from the GBP. Its GDP is expected to be at 0.7% for Q4. The GBP/USD pair is currently trading at 1.6678, with initial resistance seen at 1.6739, followed by 1.6781. Meanwhile, initial support is at 1.6654, followed by 1.6612.

By FX Strategy Team, Published on 26th of February 2014
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