Forex: EUR/USD getting whacked below 1.2910; China CPI uneventful

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Forex: EUR/USD getting whacked below 1.2910; China CPI uneventful

FITITOL--> FXstreet.com (Barcelona) - The Euro and the Australian, both very vulnerable to persisting political uncertainty in Europe, are trading directly offered vs the USD in Asia after a short-lived bounce attempt.

Focus, however, remains on JP Mrgan reported $800+ bln losses, which has just added fuel to the fire. EUR/USD and AUD/USD are currently posting sizeable losses after breaking key technical levels, although is the single unit which has paid the higher price by breaching the 1.2910 weekly low, thus opening the doors to accelerate the bearish trend.

Both pairs rebounded on a very shy fashion following further 'yet modest' signs of deflation in China, after the CPI came at -0.1 in April, 3.4% from a year earlier. Consensus had been for a -0.2% and 3.3% respectively, so the data was just around consensus. According to Michael McDonough, Economist at Bloomberg, the data is "likely the nail in the coffin for a near-term RRR cut."

AUD/USD has broken below 1.0050. " Buyers eyed around 1.0050 and 1.0025, sellers ahead of 1.010" comments John Noonan, Head of IFR Markets.

Back to the Euro, Boris Schlossberg, FX expert at BKForex commented: "Risk currencies starting to feel the impact of JPM losses as noted earlier, 1.2900 in view EURUSD," arguing that are the blow of stops on solid flows taking the Euro down.

"Dealers confirm that CME names have sold EUR aggressively in the last 15 minutes, driving it to lows near 1.2905 thus far. There is a barrier option at 1.2900 with stops directly below" notes Sean Lee from Forexlive.