TRADING TIPS :
- Forex-Dollar extends rally as euro weakens.
- Forex-EUR/USD hits fresh 2-year lows as inflation data disappoints .
- Forex-Dollar slips vs. yen, still supported near recent highs.
EUR/USD hit lows of 1.2590, the weakest since September 2012, and was last down 0.63% to 1.2605.The drop in the euro came after official data showed that the annual rate of euro are inflation fell to a five year low of 0.3% this month from 0.4% in August. The slowdown in inflation added to pressure on the European Central Bank to implement additional stimulus measures to stave off the threat of deflation in the region after the bank unexpectedly cut rates to record lows last month. A separate report showed that the euro zone’s unemployment rate was unchanged at 11.5% in August.Germany’s unemployment rate remained unchanged at 6.7% last month, in line with estimates.
GBP/USD hit 1.6287 during European morning trade, the pair’s highest since September 26; the pair subsequently consolidated at 1.6257, adding 0.09%. Cable was likely to find support at 1.6160, the low of September 16 and resistance at 1.6334, the high of September 26. In a revised report, the Office for National Statistics said that the U.K. gross domestic product increased by 0.9% in the second quarter, beating expectations for 0.8% growth and up from a previous estimate of 0.7%.Year-on-year, the U.K. economy expanded at a 3.2% rate in the second quarter, in line with expectations.Meanwhile, the dollar remained broadly supported by the view that the strengthening economic recovery in the U.S. would prompt the Federal Reserve to hike rates sooner.
1. Buy EUR/USD Above 1.2616-TG:1.2636/1.2666 SL 1.2586
2. Sell EUR/USD Below 1.2562-TG:1.2542/1.2512 SL 1.2592