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Forex: EUR/USD at lows after ZEW nice surprise

The EUR/USD went for a spike high to 1.3373 as the ZEW survey got released, but that momentum didn't last long and the market eventually gone back to its lows, around 1.3330.

Economic sentiment in both Germany (from 31.5 to 48.2) and Eurozone (from 31.2 to 42.4) improved in February survey by ZEW, beating consensus of 35.0 and 35.5, respectively. Current situation didn't do as well, dropping from 7.1 to 5.2, instead of rising to 9.0 as expected.

Also out is EMU construction output, contracting -1.7% on the month and falling further in December, from -4.7% to -4.8% (YoY). The Greek current account deficit narrowed from €-0.850B to €-0.534B in December.

“On the upside, break above 1.3400, would ease bear-pressure, however, to revive bulls and shift focus higher, regain of 1.3500 barrier and 50% of 1.3710/1.3305 is required”, wrote Windsor Brokers analyst Slobodan Drvenica, pointing to 1.3265, 1.3220 and possible test of pivotal 1.3185/70 on the downside.

Forex Flash: Cautiousness returns to EUR – UBS

According to Research Analyst Gareth Berry at UBS, “Our most recent edition of FX Flow Monitor indicated some caution returning to the euro on the part of asset managers and hedge funds. Elections in Cyprus and Italy may have played a role, however the perceived escalation in currency war rhetoric likely played a more dominant role.”
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Forex Flash: RBA Stevens testimony on Friday attracting attention – TD Securities

Given that the RBA Board meeting minutes followed Friday’s comprehensive quarterly Statement on Monetary Policy, it had to say something materially new to garner attention: “They didn’t, merely confirming that global conditions had improved and domestic data were mixed.  A repeat of “the inflation outlook…would afford scope to ease policy further, should that be necessary to support demand” confirmed the easing bias whilst in wait and see mode”, wrote TD Securities analysts, pointing to market attention on Governor Glenn Stevens’ testimony to Parliament on Friday morning, “where the strong AUD and peaking resource sector are likely to feature heavily”. “Note that Stevens speaking for himself tends to be more hawkish than Board communiqué per se”, said analyst Annette Beacher.
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