ForexLive European Wrap: Equities lead EUR lower following weak Chinese trade data
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Another dour start to the day with the EUR/USD falling to recover significantly in Asia from yesterday's fall in the US session. The Asian session was a non-event barring weak Chinese trade figures and an RBA warning over AUD strength, and Europe was little different with risk aversion building again.
Equities opened on a soggy footing following the weak Chinese trade data and lead to some early risk aversion with EUR/USD slipping just below the NY lows of 1.2267 to 1.2261. A major Spanish name was apparently stemming the outflows and was bidding aggressively in the 1.2260's according to sources.
Targets look to be the 1.2243 area which is a 50% fibo retracement of the 1.2042/43 of the recent upmove from July 24 lows to Aug 7 highs and sell stops posied on a break of 1.2240. Offers sit up at 1.2300/10 but haven't been tested as bounces off the low remain feeble.
GBP/USD drifted lower with the EUR/USD to 1.5578 from the 1.5625 area, but despite a much weaker PPI reading recovered to 1.5610 as EUR/GBP continues to remain under pressure following yesterday's fall from 0.7900
USD/JPY was dragged lower by some EUR/JPYand AUD JPY sales, slipping to 78.40 from around 78.60/65
AUD/USD tracked the EUR/USD lower but was already leading the way lower on the back of the Chinese data and warnings from the RBA that AUD strength could hamper growth. The pair found some good exporter bids just under 1.0500 prompting a recovery to 1.0527 as EUR/AUD failed to bounce.
The market remains on a soft stance with only small recoveries in european indices so far- (STOXX off 0.7%, IBEX -1.0%, FTSE MIB and DAX -0.5%, and the UK FTSE -0.7%.