EUR Trading Outlook (11-01-2012)

The Euro (EUR) the markets took heart with Fitch comments that Germany’s rating was safe at AAA and France is unlikely to be downgraded in 2012 and only Italy is currently at threat of imminent Downgrade. The EUR/USD and EUR/JPY both enjoy a relief rally for the second day but gains were limited and the major found heavy resistance above 1.2800. The downside is still likely to be tested again before we can talk of the downtrend ending. Looking ahead, Final Q3 GDP forecast at 0.2 vs. 0.2% q/q.

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