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Disappointing industrial output figures for the eurozone, reflecting weak domestic demand and exports, was not altogether surprising. With only Italy and Portugal showing a mild rise in output, the total fell 1.3% from May 2012.
The single currency is trading below the 1.3050 level and has the momentum to fall towards the 1.30 metric. The 200 DMA at 1.3112 may provide upside resistance with the 1.3180 level coming in above that.
Macro data from the US may provide some decent direction for the pair. The US producer price index is expected to remain the same as the last outing, with consensus estimates anticipating a reported rise of 0.5% in the month. Given that this is a leading indicator of consumer inflation, any significantly higher number will tend to give the US dollar a boost. US consumer sentiment will also be released by the University of Michigan, and a better statistic is expected this month with 85.3 the median forecast.
The usual contention that bad news will ensure that the Federal Reserve will not taper quantitative easing purchases still applies, so a miss on either data point will likely translate to a weaker dollar.