Euro-dollar headed lower throughout the US afternoon, the rate printed $1.2970 on release of early data that came in-line with expectations. The pair extended losses on denied talk of a US ratings downgrade by Fitch, the S&P downgrade of SocGen/Credit Agricole added further weight and euro-dollar closed in NY at session lows of $1.2927. Risk appetite increased and the rate bounced in early Asian trade, extending recovery attempts to $1.2956. Sharp cross sales after the Tokyo fix pared some gains and the rate remained in consolidation mode ahead of Europe. Traders look to release of US GDP data at 1230GMT which is expected to show growth of just under 2.0%. Even meeting expectations would likely come as a relief to markets, after the third estimate of the last quarter’s figure showed a surprisingly low 1.3% growth rate. On the downside support seen into $1.2920, a break opens $1.2906 (23.6% of $1.2043-1.3172). Tech resistance at $1.2969 (21 dma), ahead of offers at $1.2980 ($1.2978 – 5 dma).
EasyForexNews Research Team