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Forex - EUR/USD close to session lows ahead of ECB

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Investing.com - The euro was trading close to session lows against the U.S. dollar on Wednesday as investors remained cautious ahead of a European Central Bank meeting on Thursday, while weak economic data out of the euro zone also weighed.

EUR/USD hit 1.3037 during U.S. morning trade, the pair's lowest since Monday; the pair subsequently consolidated at 1.3050, down 0.24%.

The pair was likely to find support at 1.2996, the low of January 4 and resistance at 1.3095, the session high.

The ECB was widely expected to hold off cutting rates following Thursday's policy meeting, but some market participants expected the bank to flag the possibility of rate cuts later in the year.

Sentiment on the euro was hit after official data showed that German industrial production rose 0.2% November, compared to expectations for a 1% increase, underlining concerns over the outlook for the region's largest economy.

German industrial production fell at an annualized rate of 2.9% in November, in line with expectations.

Meanwhile, final data showed that the euro zone economy contracted 0.1% in the third quarter, in line with preliminary estimates.

Overall market sentiment also remained cautious amid uncertainty over the ongoing U.S. debate about raising the debt ceiling.

The euro was almost unchanged against the pound, with EUR/GBP inching up 0.04% to 0.8151, but was higher against the yen, with EUR/JPY rising 0.67% to 114.62.

The yen remained broadly weaker amid expectations that Japan's new government will pressure the Bank of Japan to step up monetary easing in order to spur growth and combat deflation.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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