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Forex: EUR/USD returning to 1.3000 after EMU PPI

After the tumble below the 1.3000 mark, to as low as 1.2982, triggered by a disappointing EMU Sentix Investor Confidence figure for March, the EUR/USD is bouncing back to the 1.3000 psychological level after the release of PPI data.

January Producer Price Index in the Eurozone rose 0.6%, beating 0.5% consensus, while the annualized data eased from 2.1% to 1.9%, as expected. Not much is being heard from the Eurogroup meeting yet, but investors will be keeping an eye.

"Last week's unsuccessful test of 1.3160 marks the end of the consolidation pattern above 1.3017 low and the downtrend has been renewed, targeting 1.2880 support zone", wrote Deltastock.com analyst Stoyan Mihaylov, pointing to initial resistance at 1.3055 ahead of 1.3100.

Eurozone: Annual PPI increases 1.9%, as expected

On an annual basis Eurozone Producer Price Index rose 1.9% in January, following a 2.1% increase the previous month, Eurostat reported on Monday. This result is in line with forecasts.
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Fundamental Morning Wrap: Italian stalemate Al fresco

This morning´s institutional research sees most focus fall on the ongoing Italian situation, with no significant signs of a break through emerging at all, so the deadlock is expected to continue for some time to come, contributing to EUR softness ahead. Looking to the UK, there is indecision over whether a further bout of QE is on its way and in Japan, nominee BoJ Governor has issued a war cry in the battle against deflation.
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