Forex - EUR/USD hits session highs, still vulnerable

The euro rose to session highs against the dollar on Thursday after steep falls in the previous session prompted bargain buying, but sentiment on the single currency remained fragile.

EUR/USD hit 1.3074 during European morning trade, the session high; the pair subsequently consolidated at 1.3063, gaining 0.22%.

The pair was likely to find support at 1.2967, the low of April 8 and resistance at 1.3113, the high of April 15.

Demand for the euro continued to be supported after the Bank of Japan’s aggressive easing program caused the yen to weaken broadly.

Spain saw borrowing costs fall to the lowest level since September 2010 at an auction of five-and ten-year government bonds on Thursday. 
Meanwhile, France auctioned five-year bonds at record low yields as sentiment on euro zone bonds remained supported by BoJ easing.

But the single currency remained under pressure amid concerns over the outlook for economic growth in the euro zone and the risk of a fresh flare up of the region’s debt crisis.

The euro fell sharply against the dollar on Wednesday after European Central Bank Governing Council member Jens Weidmann said the bank could cut interest rates if economic data indicated that it was warranted.

The euro pushed higher against the pound and the yen, with EUR/GBPrising 0.20% to 0.8565 and EUR/JPY climbing 0.45% to128.42.

The U.S. was to release official data on initial jobless claims and the Philly Fed manufacturing index later in the trading day.

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Forex - GBP/USD hits session lows after U.K. retail sales

The pound fell to session lows against the dollar on Thursday after official data showed that U.K. retail sales fell in March, underlining concerns over the outlook for first quarter growth.

GBP/USD hit 1.5218 during European morning trade, the session low; the pair subsequently consolidated at 1.5229, dipping 0.07%.

Cable was likely to find support at 1.5098, the low of April 2 and resistance at 1.5266, the session high.

The Office for National Statistics said U.K. retail sales fell 0.7% in March, slightly less than estimates for a 0.8% decline, as colder than normal weather last month had a negative impact on sales.

Retail sales for February rose by 2.1% as a result of a rebound from earlier cold weather.

Retail sales declined 0.5% year-on-year compared to expectations for a 0.6% drop.

Core retail sales, which exclude automobile sales, declined 0.8% in March, worse than expectations for a 0.6% drop.

The data added to concerns over the threat of a triple-dip recession in the first quarter, after data on Wednesday confirmed that inflation is rising at a faster pace than wage growth.

Sterling hit session lows against the euro, with EUR/GBP rising 0.18% to 0.8563.

Spain was to hold an auction of government bonds later in the day, while the U.S. was to release official data on initial jobless claims and the Philly Fed manufacturing index.

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