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Forex: EUR/USD bouncing from 1.2901 low ahead of EMU data

FXstreet.com (Barcelona) - The EUR/USD is currently biased for some correction of yesterday’s rally to 1.2949 high and eased lower for the European session. Surprisingly during one straight hour, selling pressure could only reach as low as 1.2901. Now, as investors prepare for the EMU GDP and retail sales, the market is pulling towards the opening price area. As of writing, the EUR/USD trades at 1.2925.

The final reading of the quarterly change in GDP Q4 2012 was of -0.6% recession. Soon, Eurostat will reveal the first reading for GDP Q1 2013. EMU retail sales are expected to contract -0.2% in February, after a +1.2% rise in the previous month. The annualized figure should fall further, from -1.3% to -1.8%.

Since the EUR/USD has broken above its 200 day ma and 3 month downtrend and also charted a key day reversal, Commerzbank analysts decided to “go with the break higher and allow for a deeper retracement into the 1.3050 then 1.3111/80 band, where will look for signs of failure and the resumption of the down move”, wrote analyst Karen Jones, adding that intraday dips lower should now hold over 1.2850 to maintain upside corrective pressure.

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