EUR Trading Outlook (07-12-2012)

The Euro (EUR) was crushed lower after being hit by dovish comments at the ECB meeting press conference. The ECB lowered its 2013 GDP forecasts but the major comment that traders picked up on was that the OMT was only to be used in emergencies and not to lower yields. The uptrend is under threat from the correction lower on the major and Euro Crosses. The Sterling (GBP) was dragged lower be the Euro slump but we have found support at 1.6050 on Cable. EUR/GBP fell below 0.8100 and has traded as low as 0.8070 so far in Asia. The outlook is mixed with bulls cautious given the new Euro developments and US NFP today. The BOE met and kept rates at 0.5% as widely forecast. Looking ahead, ECB President Draghi Speaks. Also German Industrial Output forecast at -0.5%m/m vs. -1.8% m/m/