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Forex: EUR/USD finds resistance at 1.2970 ahead of EMU confidence

FXstreet.com (Barcelona) - The EUR/USD keeps on moving higher today, as investors switch off their concerns regarding Cyprus and focus on the FOMC monetary policy decision that is taking place at 18:00 GMT. From 1.2857 low, the market has been climbing the chart and kept rising after the German bund auction and EMU current account data. As of writing, the EUR/USD is facing resistance around 1.2970 ahead of the preliminary release of EMU March consumer confidence, expected to improve from -23.6 to -23.3.

EMU current account surplus eased from €16.0B to €14.8B in January, higher than €7.9B consensus. Germany sold 10-year bonds at today’s auction and saw its average yield falling 1.66% to 1.36%.

“EUR/USD has thus far successfully tested the support at 1.2877 (07/12/2012 low, see also 200 day moving average) on a daily close basis”, wrote MIG Bank analyst Bijoy Kar. “However, the succession of lower highs and lower lows is still in place. Monitor the resistance at 1.2996 (18/03/2013 high)”, he added, pointing to another resistance at 1.3046 (intraday low).

Forex: USD/CAD recovers the mark of 1.0255/60

After bottoming out at 1.0236 (intraday minimum) Wednesday, the USD/CAD has recovered nearly 25 pips in recent minutes to trade at 1.0255/60 at the time of writing. During US trading, the cross is still off -0.16% from its opening however.
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Forex Flash: BoE fallout and the ensuing ramifications – UBS

Today Chancellor George Osborne announced changes to the Bank of England remit, ostensibly to formally recognize the 'use of unconventional tools'. The inflation target was kept unchanged at 2%, however the timing of the BoE open letter on CPI would be changed. Crucially, and directly citing the 'example of the Federal Reserve', the Bank of England now 'may wish to issue explicit forward guidance' and adopt 'intermediate thresholds' – i.e. numerical targets for inflation and growth, such as CPI and the unemployment rate. According to Research Analyst Geoffrey Yu at UBS, “The BoE is expected to 'assess' these changes and report the response in its August inflation report.”
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