The Euro fell by -1.4% versus the Dollar as concerns about Spain and Portugal's debts added to existing Greece's debt crisis lowering confidence in the Euro zone. ECB left the Interest Rate unchanged with 1% and declines in equity markets supported the Euro's decline. Unless Greece will likely need a bailout as the deficit continues to grow, but many oppose such move. Overall, EUR/USD traded with a high of 1.4026 and a low of 1.3585. EUR/USD has broken below its' 200 weekly moving average and is trading in oversold RSI conditions on the daily chart. The downtrend is still strong but a correction due to oversold conditions is possible. Looking Ahead, French Industrial Production is expected on Wednesday with 0.6%. ECB will release its Monthly Bulletin on Thursday. German Prelim GDP is expected weaker with 0.1% versus 0.7% prior on Friday along with Flash GDP and Industrial Production. Surprises in the GDP might change the Euro's short term direction but broader financial market activity will set the tone for the Euro.
The Pound slid -2.2% versus the Dollar and weakened versus the Euro. BoE left the Interest Rate unchanged at 0.5% and the Q.E program at 200 billion Pounds. Manufacturing PMI unexpectedly rose to 56.7 from 54.6 and Construction in the UK showed improvement. The Pound fell due to broad based Risk Aversion due to budget deficits across Europe and declines in equity markets. Overall, GBP/USD traded with a high of 1.6069 and a low of 1.5558. GBP/USD has broken below its 50 weekly moving average, reaching an 8 month low. The Pounds continues to be in bearish momentum and has no near major support level. Looking Ahead, RICS House Price Balance is expected with 29% on Tuesday morning. Manufacturing Production is expected higher with 0.4% on Wednesday. BOE will release its Inflation Report also on Wednesday along with the NIESR GDP estimate.