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Forex: EUR/USD falls to 1.3200 after EU Commission growth forecasts

The European Commission revealed its growth forecasts for the Eurozone and the EUR/USD upside turned sour with a fall back to 1.3200 mark. The EU Commission kept the 2013 GDP forecast at +0.9%, and +1.9% in 2014. German 2013 GDP growth was revised lower from 0.8% to 0.5%. The Greek 2013 GDP was revised lower as well, from -4.2% to -4.4%, but to grow 0.6% in 2014.

The Italian consumer confidence rose from 84.7 to 86 in February, instead of only moving to 84.8.

The EUR/USD had spiked up to 1.3245 high on the release of German IFO February survey, but the overall price action has been mostly at 1.3210/20 range, but higher on the day (opening price at 1.3192). All three criteria came in higher than expected: Business Climate rose from 104.3 to 107.4 (consensus of 105.0); Current Assessment rose from 108.1 to 110.1 (consensus of 108.5); Expectations rose from 100.6 to 104.6 (consensus of 101.3).

Earlier, German GDP figures confirmed the -0.6% quarterly contraction in Q4. Also out was Italian CPI in January, down from 2.3% to 2.2% (YoY) and from 2.6% to 2.4% (EU Normalized).

“Loss of 1.3160 is required to confirm bearish breakout and expose the next targets at 1.3130/20, 90 day MA / 05 Dec 2012 peak”, wrote Windsor Brokers analyst Slobodan Drvenica, pointing to initial resistance at 1.3230 and 1.3264, and sidelined bears above 1.3300 barrier.

Italy Consumer Confidence increase to 86 in Feb from 84.7 in Jan

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