The lack of clear catalysts kept traders away from building positions in the European common currency against its US counterpart ahead of the London session on Friday and the technical picture suggests more bearishness may be in the offing.
Some positive sentiment was generated after the executive board of IMF approved a EUR 28 billion ($36.49 billion) loan for Greece on Thursday despite some members' concerns regarding the debt-ridden nation's repayment ability and Greece's ability to adopt stringent austerity measures.
The lender said in a brief statement that it will immediately disperse EUR 1.65 billion ($2.15 billion) of these funds to Greece as part of the debt-stricken country's second bailout aimed at keeping Athens funded until 2014.
Positive U.S. economic data boosted sentiment, with the weekly jobless claims showing a bigger-than-expected fall, producer price inflation in February rising more than what was recorded in the previous month and the New York Federal Reserve's survey showing that manufacturing activity expanded at a faster rate in March.
The euro is likely to extend its sell-off versus the US dollar, as it breached the neckline of a head and shoulder pattern in the daily chart. Besides, the pair is well-below its 100-day simple moving average level at 1.3234 and also fell slightly below its 23.6 percent retracement level of 1.3025 yesterday.
A number of macroeconomic factors in the New York session later in the global day, including the U.S. inflation, industrial production and the University of Michigan's consumer confidence data, could influence the trend of the pair in the upcoming session.
by RTT Staff Writer
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