Forex: EUR/USD plunges on EU recession in 2012

FXstreet.com (Barcelona) - Besides of keeping an eye on the Greek Parliament vote on austerity, totaling an amount of €13.5B, to ensure the next aid tranche from donor countries, and consequently, to keep Greece from bankruptcy, the market is now reacting to the European Union report on its GDP forecast.

Although growth by 0.4% (EU) and 0.1% (Eurozone) is expected in 2013, the report states that there will be recession in both areas, by 0.3% and 0.4% respectively, this year. The statement says unemployment will remain very high, with some countries' domestic demand hurt by the still large (though reducing) internal and external balances and its economic activity significantly diverging.

Risk aversion has taken over the market, and the EUR/USD reached 1.2743 low, extending November decline further, below Sept-10 low (1.2755). “Although there is an intraday impulse after the recent break above 1.2820, the pair is still struggling below 1.2885 resistance and the downtrend from 1.3139 remains intact”, wrote Deltastock.com analyst Stoyan Mihaylov, bearish and for fall to 1.2690.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

RELATED TOPICS