The euro hit a three week low against the dollar in active trade today as the unwind of the EURGBP long positions weighed on the currency throughout early European trade. In a session essentially empty of any key economic data trading was dominated by technical factors as cross selling and continued dollar strength took the EURUSD below 1.3500 figure.

Today’s trading comes across as mostly a denial of facts. Perhaps it is the jubilation that comes with the start of a New Year, or the low volume at the end of a holiday week, but today’s numbers certainly cast a concerning picture on an already weakened economy. Price action in the dollar is also equally perplexing, as the currency posts broad gains in today’s market. However, we warn that the facts in the marketplace will inevitably catch up with those who are once again convinced that the economy has hit the bottom.