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Forex Flash: German ZEW will be main event today - BBH

Brown brothers Harriman analysts notes that the main economic events for this week will be the German ZEW survey today and then the flash PMI´s on Thursday.

Further, they note that the Italian elections this weekend look to be a close contest, and they see a real possibility of a hung parliament. However, aside from those risks, they comment that the future of the euro continues to be closely tied to that of short-term interest rate differentials. They write, “The 2-year US-Germany spread appears to be building a base above 15 bp. We expect caution ahead of the end of next week when European banks can begin paying back funds from LTRO II.”

From a technical perspective, the team feel that it’s worth noting that the 5-day moving average for EUR/USD has crossed below the 20-day moving average last week. They feel that this suggests some scope for a continued trend lower. However, on the other hand, the trend line drawn off the early Jan high is near $1.3440 on Monday and falls toward $1.3350 by the end of the week. They write, “A move above this trend line will help stabilize the technical tone.”

Greece Current Account (YoY): €-0.534B in Dec from €-0.85B in Nov

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Forex Flash: Majors edge down against USD over US holiday - OCBC Bank

Emmanuel Ng of OCBC Bank notes that amid a long NY weekend, the majors edged slightly lower against the greenback while JPY continues to weaked as Japanese PM Abe continues to talk it down.
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