EUR/USD rebounded a bit but still appears set to test support at 1.3697

FXstreet.com (Barcelona) - The EUR/USD rallied Monday despite the rise in the 10-year US Treasury Yield (which should have led to a rise in the DXY). There are obviously two sets of traders and opinions out there…

EUR/USD traders to react to European and US data Tuesday as everyone awaits the Fed

The action in the bond markets is signalling a commencement of Fed tapering either this week or at January’s meeting. Meanwhile, the global currency trading crowd seems to be less certain of that tapering scenario – as evidenced by the relative weakness in the greenback Monday even as US rates rose.

Tuesday, EUR/USD traders will be closely monitoring the following data points out of Europe and the US including:

• EuroZone CPI
• EuroZone Labor Cost
• German Economic Sentiment and Current Situation
• Euro Group Meeting
• US CPI
• US NAHB Housing Market Index

Technical outlook for EURUSD

Technicians say the EUR/USD reversed lower at 1.3791 technical resistance and has been in ST correction mode ever since. More downside to at least the first Fibonacci support at 1.3697 is expected, but the pullback could take the EUR/USD down to 1.3667 (more Fibonacci support). Once the correction runs its course, technicians expect EUR/USD to continue on up to the next resistance at 1.3803 – the 10/25 close.

Dec 17, 2013

More mass fake invoicing out of China

Following the crackdown in fake invoicing out of China from earlier this year, the Chinese regulator body SAFE (State Administration of Foreign Exchange) found an additional 112 companies involved in fake export transactions. According to headlines: "SAFE has posted a statement on its website that it has found 112 companies involved in fake export transactions" adding "fake invoicing has been used to bring capital into the country to benefit from the rising yuan."

Australian MYEFO downgrades budget deficit

Australia Mid-Year Economic and Fiscal Outlook, also known as MYEFO, predicts the 2013/14 budget deficit to stand at A$47bn vs A$30 bn August estimate, a number which is very much in line with pessimistic estimates, and falls somehow short to produce any major blow for the Australian Dollar value short term. Further details are coming up.