Flows are light with most in the US on holiday but the algoritims are still fired up and there are just enough folks around to create some late mischief. EUR/USD has fallen to fresh session lows at 1.3105 in late afternoon after a string of poor economic headlines for the eurozone. On the wires now is Eurogroup head Juncker saying his group with European Commission’s sharply downwardly revised economic forecasts for 2009 (-1.9%).
EUR/USD has dipped through support at 1.3111, the 76.4% retracement of the rally from 1.3025 lows seen on Thursday morning, implying a retest of those lows tomorrow, if not lower.
EU economics Czar is on the wire with a good point: the Russian gas crisis will take a further dent ut of European economic data, particularly in Eastern and Central Europe where the affects were greatest. He says the forecasts released today do not take into account the crisis. He also says he is not considering the possibility of default by an EU country on its debt. It looks as though he should be worried about Ireland if not Greece and Spain.