Forex snapshot

The euro has drifted lower as German import data disappoints, while sterling eyes $1.7 ahead of mortgage data.

Euro and US dollar notes
Source: Bloomberg

Euro slides overnight

The euro continued its move lower in overnight trading and weak German import data didn’t help it. It is trading at $1.3432, and has been stuck in the $1.3440-$1.3420 range for the past 12 hours, with the bias to the downside.

The currency pair is eyeing the $1.34 mark, and the lack of newsflow has prevented it from falling that far yet. Tomorrow will be a test for the euro as Germany releases its consumer price index in the morning, followed by the Federal Open Market Committee meeting in the evening.

Deflation is still the main focus for the European Central Bank, and Germany continues to hold the most sway in the region. Soft data from the Germans will set the tone for eurozone CPI and unemployment on Thursday.

As Brenda Kelly stated, if the euro dips below $1.3420 it could put $1.34 on the map with $1.3470 acting as resistance. 

Sterling jumps after mortgage approvals

The pound is trading at $1.6990, slightly higher on the session after traders were impressed with the UK mortgage approvals data.

As Brenda Kelly stated, the pound has lost ground against the US dollar in previous sessions, leaving traders with a good buying opportunity. The big picture for the UK is that the economy is moving in the right direction, which leaves the pound undervalued in relation to the US dollar. If sterling can breach through the $1.7 mark, the next level up is $1.7060, with $1.6970 acting as support.

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