Forex Trading: EUR/USD Moves Higher On US Economic Weakness

The EUR/USD has moved higher steadily throughout the day. The 1.3000 level on the downside held support in early Far East trading and the market used that level as a springboard for gains.  The economic numbers out this morning were horrible and should lead to a lower stock market.  In the past, this led to a lower EUR/USD.  However, we are starting to see more of a negative dollar slant as the poor economic news is getting weaker and weaker.  There may be a reluctance for US altogether by investors.

From a techical perspective the high from October 30th was 1.3296.   This would be a target level.  Longer term, the target would be the 38.2% retracement of the move down from the highs.  That level comes in at the 1.3743 level.

The EUR/GBP continues to help as the EUR/GBP has moved sharply higher to new record levels.  The theory is that the fiscal measures by the UK (and the US) will ultimately hurt the deficit and this will lead to a sharply lower currency in their countries.

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