10/10/12: EUR/USD: Trading lower on Draghi’s speech (CozForex)

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Coz Forex UK: For the 24 hours to 23:00 GMT, EUR dropped 0.95% against the USD and closed at 1.2852, as investors sought the safety of the greenback a day the after International Monetary Fund lowered its 2012 and 2013 global growth forecasts. In the Asian session, the pair is trading at 1.2848, with the EUR trading 0.04% lower from yesterday’s close.

The Euro again came under pressure, after the EC President, Mario Draghi drove the traders away from riskier bets by stating that the European economy continues to face challenges. He said that downside risks to Euro-area economic outlook are mainly related to the tensions in the region’s financial markets. He also indicated that the bank expects weak economic activity in the near term and only a very gradual recovery thereafter.

Furthermore, the German Chancellor, Angela Merkel, in her first visit to Greece for the first time since 2007, showed that Greece was on a “tough path” and that the coalition government led by Prime Minister, Antonis Samaras still had to push through more key cost-cutting reforms. Additionally, the Greek Prime Minister, Antonis Samaras said that Merkel’s visit to Greece proves that the country is breaking an international isolation.

On the economic front, trade deficit in France widened to €5.3 billion in August, higher than the predicted deficit of €5.0 billion and compared to a revised deficit of €4.1 billion in July.

Technically, EUR/USD are predicted to find its first resistance at 1.2948, and a rise through could take it to the next resistance line of 1.3047. Also, the pair is predicted to find support at 1.2792, and a fell through could take it to the next support line of 1.2736.

Trading trends in the pair today are predicted to be determined by the release of Germany’s wholesale price index and industrial output data in Spain and France. In US, investors await the release of the Federal Reserve’s Beige Book.

Cozfx