FX.co ★ EUR/USD. Forecast for April 11, 2013

Yesterday data on Industrial production in France in February was published. It grew 0.7% vs. forecast for 0.2%. However, Italy’s Industrial production dropped 0.8% vs. expectation for a 0.4% fall. As a result the investors did not take urgent actions until the opening of the US session. However, it did not clear the situation: Minutes of FOMC meeting showed that several Federal Reserve officials said the central bank should begin tapering its quantitative easing program later this year and stop it by year end. Nevertheless, the investors took into consideration the fact that labor force reduces every month and creates illusive notion that unemployment rate drops, the FOMC meeting took place before the publication of weak data on Non-Farms in March and the committee officials were exaggeratedly optimistic.

On the whole, the situation was negative: it is expected the Italy’s government debt to peak this year at close to 130% of GDP, compared to the 125% it projected in mid-2012. Yesterday the European Commission warned of “excessive” risks to the economic health of Slovenia and Spain, calling on both governments to take urgent action to stem the spread of the euro crisis. Slovenia faces a credit contraction that leaves the state as the main source of capital and ‘further recapitalizations are likely to be needed,” the commission said. The markets grew only on the notion of increase in the foreign market demand from China which caused trade deficit. But the idea is weak and will spot when the Industrial reports are published. As a result DJIA grew 0.88%, the euro dropped 13 points.

US President Barack Obama sent a $3.8 trillion budget to Congress yesterday calling for more tax revenue and slower growth for Social Security benefits in a political gamble intended to revive deficit-reductions talks.

Every Thursday at 16:30 GMT+4 data on US Initial Jobless Claims is published. It is estimated to be 362,000 vs. 385,000 in the previous week. Even if the data is not worse than the forecast the figure is considerable. At 21:00 GMT+4 US treasure holds 30-year bond auction, as it was yesterday it will be a restrictive factor for the euro.

On the daily chart the price did not manage to test the resistance of indicator lines and two trendlines and now it is lower. On the H4 Marlin Oscillator moved to the negative area. The downward movement is expected after the level of 1.3043 is tested; the first target is 1.3022, the second is 1.3004, the third is 1.2990, and the fourth is 1.2968.