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Forex: EUR/USD with low at 1.2912, bouncing after improved US data

The EUR/USD has gone as low as 1.2912 as the market prepared for the load of US data at 12:30 GMT. Both current account and jobless claims improved more than expected.

The US current account deficit narrowed from $-112.4B to $-110.4B in Q4, beating the $-112.80B consensus. However, Q3 data was revised much higher from $107.51.

In the week ending at March 10 week, initial jobless claims dropped from 342K (revised from 340K) to 332K, against a market consensus pointing to 350K. Continuing claims rose from 3.113M to 3.024M, better than the expected 3.100M.

As expected, the US Producer Price Index rose 0.7% (previously at 0.2%) (MoM) and 1.7% (previously at 1.4%) (YoY) in February. Excluding food and energy, data eased from 1.8% to 1.7% (YoY), with a monthly rise of 0.2%.

The EUR/USD is currently trading above 1.2930 ahead of FOMC Member Raskin's speech at 13:00 GMT. Meanwhile, the EU leaders are meeting to discuss measures to promote growth.

"EUR/USD has breached its support at 1.2967 (01/03/2013 low), but the current lack of followthrough could indicate a false breakout", wrote MIG Bank analyst Bijoy Kar, pointing to an hourly resistance at 1.3000 (intraday low). "However, a break of the resistance at 1.3074 (12/03/2013 low, see also the declining trendline) is needed to negate the short-term bearish bias. An hourly support is at 1.2924 (13/03/2013 low)", he added.

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