EURUSD moving towards the centre of the channel

The European Commission cut its forecast for the euro-area economy to show a contraction twice as deep as it projected just three months ago, and said the region’s deficit will swell to more than double the European Union limit.

The economy of the 16 countries sharing the euro will shrink 4 percent in 2009 and 0.1 percent in 2010, the Brussels- based commission, the European Union’s executive, said today, revising a January estimate for a contraction of 1.9 percent this year. The region’s average budget deficit will swell to 6.5 percent of output next year, when unemployment will rise to 11.5 percent, the commission said.

This news has weaken EURO. EURUSD is moving towards the centre of the channel.