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Forex: EUR/USD held by 1.2980 on US session

FXstreet.com (Barcelona) - The EUR/USD downside is stalling at the 1.2980 line as the New York session opens with the US durable goods orders report already out. The EUR/USD peaked at 1.3034 high by mid-European morning as the pair reacted higher following a tumble to 1.2956 low on the very disappointing German IFO survey that confirmed weakening activity in the country after yesterday’s PMIs. As of writing, the pair is trading just below the 1.3000 level.

US durable goods fell by -5.7% in March, instead of only -2.8% as expected. February data was revised lower, from 5.6% to 4.3%. Data excluding transportation was also disappointing, down by -1.4% (consensus of +0.5%) and downward revision from -0.7% to -1.7% in February.

The German IFO survey came in lower than expected for the April report: drop from 106.7 to 104.4 in business climate (consensus of 106.2), fall from 109.9 to 107.2 in current assessment (consensus of 109.5) and drop from 103.6 to 101.6 in expectations (consensus of 103.0). “So with France looking a touch better but still very weak into April, and German surveys heading lower again, we think that will be enough to get the ECB debating the potential for up to 50bps of cuts, but actually delivering a 25bps cut to the refi rate in May and leave the debate for further action until June”, wrote TD Securities analyst Jacqui Douglas.

“The EUR/USD currency pair was able to reach only the level of 1.2875. The structure of this wave implies that the price may continue falling down towards the target at 1.2940”, wrote Roboforex.com analyst Igor Sayadov, expecting then an ascending correction to test the level of 1.3030 from below and then start a new descending structure to reach the level of 1.2880.

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