EURUSD modest bounce EURUSD pair fell sharply with London opening, as banking woes in Europe triggered risk-averse trading late Thursday. News that the Deutsche Bank has to face a fine of up to $14 billion for mis-selling mortgage securities in the US. Shares of the German lender fell below €10 this Friday for the first time ever, prompting further losses in the common currency. Adding to the negative mode, Commerzbank, the second largest German bank, announced that it will cut as much as 7,300 jobs and stop paying a dividend amid a broad restructuring of its business
Data released early Europe showed that the unemployment rate in August, remained at 10.1%, against expectations of a slight improvement, while in the same month, inflation in the region rose by 0.4% in September, according to preliminary estimates and matching expectations, while compared to a year before, it came in at 0.8%, below expectations of 0.9%. Ahead of Wall Street’s opening, the US released its Personal Income and Spending figures, generally disappointing as spending resulted flat at 0.0% while income, rose by 0.2% as expected, both when compared to July.
The EUR/USD pair recovers modestly from a daily low of 1.1153, although in the short term, the movement seems just corrective, as technical indicators are barely bouncing from oversold readings, whilst the price remains well below its moving averages, with the 20 SMA having accelerated its decline and crossed below the 200 SMA. In the 4 hours chart, the price has also moved sharply below its moving averages, while technical indicators have pared their declines, and are aiming modestly higher, still below their mid-lines. The pair needs to recover above 1.1190 to get rid of the short term negative tone, although renewed selling interest below the mentioned daily low, will likely see the pair quickly extending to 1.1120, the base of its latest range.