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Forex: EURUSD tumbles on US Philly Fed and IMF’s Lagarde

FXstreet.com (Barcelona) - Boosted by the New York opening, the EUR/USD climbed again to 1.3075 resistance, where it had already peaked during the European morning. Profit taking has since then pulled the pair to 1.3050, but the release of US data triggered a tumble, that erased the market’s daily gains down to 1.3027, as of writing. Also driving the EUR lower are IMF Lagarde’s comments that the ECB clearly has room to ease more and a rumor that a French bank may be in trouble.

In April, the manufacturing survey by Philadelphia Fed dropped from 2.0 to 1.3 instead of rising to 3.3, as expected by consensus. New orders fell from -0.5 to -1.0 and employment tumbled from -2.7 to -6.8. Following a 0.5% rise in February, the CB Leading Indicator contracted by -0.1% in March. Market consensus was suggesting an improvement of 0.1%.

US initial jobless claims came 2K higher than expected, at 352K in the April-13 week, and the prior week’s figure was revised higher by 2K, to 348K. Continuing claims fell from 3.108M to 3.068M, below the 3.075M consensus. And the prior week’s data was revised higher from 3.079M to 3.103M.

Spain had its 3, 5 and 10-year debt being sold at 3.257% (from 3.598%), 2.792% (from 3.019%) and 4.612% (from 4.898%), respectively, raising a total of €4.71B. In France, 2 and 5 year bills totaled an amount of €7.911B, with yields at 0.24% and 0.73%, respectively.

“The EUR/USD completely retraced Tuesday's rise yesterday, validating a bearish engulfing pattern and calling for a short-term bearish bias”, wrote MIG Bank analysts Bijoy Kar and Luc Luyet, pointing to hourly resistances at 1.3102 and 1.3125 (50% and 61.8% retracement of yesterday's decline), while hourly supports are at 1.3002 (17/04/2013 low) and 1.2962 (08/04/2013 low).

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