Euro was on a weak footing as USD strengthened broadly before being knocked lower on weaker than expected data. GFK Consumer Confidence dropped to 1.5 and Q2 German GDP was confirmed at -0.5%. The big market mover was August IFO Index which fell more than expected to 94.8 vs. the 97.1 forecast. The Euro broke through support at 1.4600 before a rally in Oil allowed some relief. Looking ahead for German Import Prices are expected to rise 0.5%. The Sterling new multi year lows where plumbed as USD gained all day and support at 1.8400 gave way. Heavy selling in the GBP/JPY added pressure.
Technical Outlook:
EURO R1: 1.4790 S1: 1.4630
R2: 1.4820 S2:1.4610
Euro is expected to give a bear move for the day. Trading range for the day is expected between 1.4660-1.4780 levels for the day. Stochastic lies in oversold area and is seen trending up giving room to a slight upward correction.
GBP R1: 1.8550 S1: 1. 8320
R2: 1.8600 S2: 1. 8300
chart pattern gives the possibility of slight upward correction for the day. Trading range is expected between 1.8340-1.8530 levels . Currency has crossed the pivot levels and stochastic is also supporting the bull note and is expected to test the R1 level for the day.
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