Forex: EUR/USD plunges on EU recession in 2012 (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 analyst Stoyan Mihaylov, bearish and for fall to 1.2690.

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