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Forex - EUR/USD turns lower but downside seen limited

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Investing.com - The euro turned lower against the U.S. dollar on Tuesday, but the single currency remained supported close to 11-month highs after the head of the Federal Reserve indicated that the bank intended to continue its quantitative easing program.

EUR/USD hit 1.3339 during late Asian trade, the session low; the pair subsequently consolidated at 1.3353, shedding 0.21%.

The pair was likely to find support at 1.3247, Friday's low and resistance at 1.3403, Monday's high and an 11-month high.

In a speech on the economy and monetary policy on Monday, Federal Reserve Chairman Ben Bernanke said that he was still unsatisfied with the economy's progress, despite some recent signs of improvement.

Earlier Monday, the president of the San Francisco Federal Reserve Bank said he expected the Fed to continue its bond buying program "well into the second half of 2013."

The single currency continued to be supported by optimism that the worst of the crisis in the euro zone has passed.

The euro pulled back from nine-month highs against the pound, with EUR/GBP down 0.26% to 0.8301 and was down sharply against the yen, with EUR/JPY dropping 1.01% to 118.52.

The yen strengthened broadly after Japan's economy minister said earlier that a weak yen could have a negative impact on the economy by pushing up import prices.

Later in the day, the euro zone was to produce official data on the trade balance.

The U.S. is to publish government data on retail sales, as well as official data on producer price inflation and manufacturing activity in New York state.

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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.

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