For the 24 hours to 23:00 GMT, EUR declined 1.09% against the USD and closed at 1.2388, after the European Central Bank (ECB) President, Mario Draghi, cautioned that downside risks to Euro-region growth are materializing.
Yesterday, ECB also cut its key interest rate by 25 basis points to 0.75% in June, below 1.0% for the first time since its existence. Additionally, the central bank reduced its deposit rate to 0% for the first time to help to help tackle the Euro-zone debt crisis.
In a bond auction, Spain’s Treasury sold €3 billion ($3.8 billion) of 3-, 5- and 10-year debt, hitting the top end of its target range but saw a further rise in borrowing costs. Separately France raised €7.83 billion by selling bonds maturing in 2019, 2022 and 2023. Moreover, Ireland sold €500 million three-month Treasury bills at a yield of 1.8%, returning to capital markets after it received Euro-zone bailout in 2010.
In economic news, factory orders in Germany rose 0.6% (MoM) in May, following a 1.4% fall in April.
In the Asian session, at GMT0300, the pair is trading at 1.2381, with the EUR trading 0.06% lower from yesterday’s close.
The pair is expected to find support at 1.2318, and a fall through could take it to the next support level of 1.2254. The pair is expected to find its first resistance at 1.2491, and a rise through could take it to the next resistance level of 1.2600.
In today’s trading session, German industrial production is expected to fell 1.2% on a monthly basis in May.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.