EUR/USD: Euro extends its gains in the Asian session


EURUSD Movement

For the 24 hours to 23:00 GMT, the EUR rose 0.43% against the USD and closed at 1.1484.

Data indicated that the Euro-zone’s final consumer confidence index climbed to a level of -7.9 in January, in line with market expectations and confirming the preliminary print. In the prior month, the index had recorded a revised reading of -8.3.

On the other hand, the region’s economic sentiment indicator dropped to a two-year low level of 106.2 in January, compared to a revised level of 107.4 in the previous month. Market participants had envisaged the economic sentiment indicator to fall to a level of 106.8. Moreover, the business climate indicator declined to a level of 0.69 in January, compared to market anticipations for a slide to a level of 0.77. The business climate indicator had registered a revised level of 0.86 in the prior month.

Separately, in Germany, the preliminary consumer price inflation slowed to a 11-month low level of 1.4% on an annual basis in January, less than market expectations for an advance of 1.6%. The CPI had registered a rise of 1.7% in the prior month. Furthermore, the nation’s Gfk consumer confidence index unexpectedly jumped to a level of 10.8 in February, defying market expectations for a drop to a level of 10.3. In the prior month, the index had recorded a revised reading of 10.5.

The US dollar declined against a basket of currencies, after the US Federal Reserve (Fed) paused its rate hike policy.

The Fed, in its latest monetary policy meeting, kept its benchmark interest rate unchanged at 2.50%. The central bank signalled that it would remain “patient” on future interest rate hikes. Further, the Fed revealed that it expects the economy to expand and enhance jobs growth. However, the central bank expressed concerns over growing uncertainty about the outlook.

In the US data showed that, the US private sector employment advanced by 213.0K in January, compared to market expectations for a gain of 181.0K. The private sector employment had registered a revised increase of 263.0K in the prior month.

On the flipside, the nation’s pending home sales declined 9.8% on an annual basis in December, dropping to its lowest level since 2014 and following a fall of 7.7% in the preceding year. Additionally, the MBA mortgage applications dropped 3.0% on a weekly basis in the week ended 25 January 2019, compared to a decline of 2.7% in the previous week.

In the Asian session, at GMT0400, the pair is trading at 1.1502, with the EUR trading 0.16% higher against the USD from yesterday’s close.

The pair is expected to find support at 1.1436, and a fall through could take it to the next support level of 1.1370. The pair is expected to find its first resistance at 1.1538, and a rise through could take it to the next resistance level of 1.1574.

Looking ahead, traders would await the Euro-zone’s 4Q gross domestic product and unemployment rate for December along with Germany’s unemployment rate for January and retail sales for December, set to release in a few hours. Later in the day, the US personal income and personal spending, both for December followed by the Chicago purchasing managers’ index for January, will garner significant amount of investors’ attention.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

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