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EUR/USD deflates to sub-1.2700

FXStreet (Edinburgh) - The shared currency is now giving away earlier gains as selling interest seems to be back in town, dragging EUR/USD to session lows in the 1.2690 region.

EUR/USD looks to CPIs, ZEW

After hitting peaks beyond 1.2760 during late US session on Monday, the pair initiated a down move, which has actually extended to the vicinity of 1.2680. In the meantime, French and Spanish consumer prices still remain depressed, while Italian CPI is expected to follow suit, adding further downside pressure to prices in the euro area. Further data will show EMU’s industrial production figures, followed by the key ZEW Survey in Germany and Euroland. “Further up-move is still likely for today but any further gain is likely limited to the recent high near 1.2785/90. Expect the support at 1.2700 to hold from here”, noted Quek Ser Leang, Market Analyst at UOB Group.

EUR/USD levels to watch

At the moment the pair is retreating 0.42% at 1.2697 with the next support at 1.2663 (10-d MA) followed by 1.2648 (200-h MA) and then 1.2605 (low Oct.10). On the upside, a breakout of 1.2791 (high Oct.9) would expose 1.2802 (30-d MA) and finally 1.2816 (low Sep.22).

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