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EUR/USD falls to 1.2560

FXStreet (Edinburgh) - The single currency intensifies its intraday drop on Friday, dragging EUR/USD to fresh lows in the 1.2560/55 band.

EUR/USD retreats from 1.2600

Spot broke below the overnight consolidative pattern today, leaving the area of 1.2600/10 to challenge weekly lows in the mid-1.2500s. Data wise, German retail sales plummeted 3.2% inter-month during September, taking the annual reading to 2.3%. In the meantime markets are waiting for the key advanced inflation figures in the euro area, with consensus expecting the headline CPI to come in at 0.4% YoY and the Core gauge at 0.8% YoY. “We have lowered our forecast for October euro-area headline CPI to 0.3% y/y, in line with the previous month’s estimate. This should maintain the pressure on the ECB to do more, although we expect the ECB to remain on hold at next week’s meeting. As such, we expect any bounce in EUR/USD to be short-lived given diverging monetary policies”, observed Arne Rasmussen, Chief Analyst at Danske Bank.

EUR/USD key levels

The pair is now losing 0.40% at 1.2562 and a breach of 1.2545 (low Oct.30) would target 1.2504 (low Oct.6) en route to 1.2501 (2014 low Oct.3). On the upside, the initial hurdle aligns at 1.2639 (high Oct.30) followed by 1.2692 (21-d MA) and finally 1.2770 (high Oct.29).

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