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Forex: EUR/USD tumbles after German unemployment and Mario Monti

Following German unemployment figures and Italy's PM words, while ahead of EMU and German CPI data, the EUR/USD slipped below the opening price and fell to the lower area of 1.31. Currently, the pair trades at 1.3114 (-0.17% on the day).

German unemployment dropped less than expected in February, by -3 instead of -5, with the rate staying at 6.9% instead of the 6.8% consensus. Italian Prime Minister Mario Monti warned that granting postponement of deficit targets harms credibility.

The Spanish GDP fell more than expected, from -1.6% to -1.9%, instead of -1.8%. In Q4, GDP contracted -0.8%. Good news is that current account balance improved from €1.78B to €4.87B in December.

“Overall bearish tone, however, keeps the downside risk in play, with current move seen as corrective and preceding test of 1.3000, next target”, wrote Windsor Brokers analyst Slobodan Drvenica, pointing to a break above 1.3300/15 to delay bears in favor of stronger recovery.

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