ForexLive European Wrap: EUR/USD slides again as BUBA downgrades growth forecasts and very weak German IP data keeps the tone heavy ahead of the NFP release

Author: Pete Jackson | Category: News

What should have been a quiet snooze ahead of the US NFP data release this afternoon was rudely shattered by  BUBA’s  forecasts on German growth, which shunted EUR/USD on the back of some system fund selling through ACB bids in the 1.2945/50 area and triggered stops down to 1.2917.

Spanish and Italian bond yield rose sharply with the respected stock indices following lower to the tune of  around -0.7% and 1.0 % down.

This was followed by news of a 7.3 quake in Japan that took the shine off USD/JPY and EUR/JPY to lows of 82.17 and 106.20 from session highs of 82.44 and 102.86, before recoveries in both to 82.44 and 106.64. EUR/USD’s rally was limited to 1.2944 after earlier session highs around 1.2964 and has remained under pressure since on weaker German IP data hitting a fresh low of 1.2915 on the session.

Cable lost ground from session highs around 1.6061 slipping to 1.6021 on weak industrial /manufacturing data, but the move originally tempered by a weaker EUR/GBP following the BUBA forecasts.

AUD/USD continues to defy gravity in a tight 1.0460-83 range with strong bids lying in wait down at 1.0440/60, with some attraction towards the 1.0500 and 1.0520 expiries today ahead of barriers in place at 1.0525 and 1.0550. EUR/AUD helped the cause with a further pull back to 1.2331 from earlier  session highs of around 1.2367.