Risk appetite continued to look mixed in London as markets cautiously await the announcement of US Treasury Secretary Geithner's financial rescue plan (which has been delayed until tomorrow). Economic data out of the eurozone continued to print weak. The German trade balance was a less robust than expected 6.9 billion in December and down from 9.9 billion the prior month. Investor confidence in the eurozone, meanwhile, plunged to -36.1 in February after a -34.4 reading last month and remained near cycle lows.
EUR rallied despite the bad economic news as the strong finish in US stocks going into the weekend continues to keep risk trades in FX overall supported. EUR/USD rallied 85 pips in London trading and was sitting near 1.30 resistance. The next big barrier above here looks to be 1.3070 while good short-term support lurks into 1.2890 (the 200hr SMA). The yen crosses were bid and EUR/JPY jumped nearly 150 points towards the 119 mark while USD/JPY was up a more modest 50 pips near the 91.50/60 zone. With no top-tier economic data or major policy speeches up today, we expect technical levels to rule.
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