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EUR/USD found support near 1.2600

FXStreet (Edinburgh) - The shared currency remains submerged in the red territory as markets surrender to the weekend lull, taking EUR/USD to the 1.2630/35 region so far.

EUR/USD hinges on risk, China docket

While spot is looking to consolidate the recent retracement from the 1.2800 neighbourhood, key Chinese trade balance data will put the risk sentiment to the test on Monday. Market consensus expects the trade deficit to shrink to $41.0 billion, with exports expanding almost 12% and imports decreasing 2.7% on a yearly basis. A positive surprise in the release would allay jitters of a slowdown in the economy of the Asian giant, boosting the riskier assets. “We expect EUR to stabilize in the near-term before resuming its downward trend; holding a year-end target of 1.25 and a 2015 year-end target of 1.21”, signalled Camilla Sutton, Chief FX Strategist at Scotiabank.

EUR/USD levels to consider

The pair is now retreating 0.51% en 1.2637 with the next support at 1.2609 (low Oct.10) followed by 1.2583 (low Oct.7) and then 1.2504 (low Oct.6). On the flip side, a break above 1.2650 (10-d MA) would open the door to 1.2760 (21-d MA) and finally 1.2791 (high Oct.9).

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