For the 24 hours to 23:00 GMT, EUR rose 0.91% against the USD and closed at 1.2465, amid hopes that the European Central Bank (ECB) would take action to ease Spanish and Italian borrowing costs and following successful Spanish bond auction.
In a bond auction, Spain raised €4.51 billion ($5.6 billion) in a sale of 12- and 18-month bills with demand exceeding supply. Compared to a similar sale on July 17, the 12-month bond yield fell to 3.070% from 3.918%, while the 18-month rate dropped to 3.335% from 4.242%.
Adding to the positive tone, the UK Telegraph newspaper reported that it could confirm weekend reports that the ECB might set a cap on peripheral Euro-zone bond yields at its next policy meeting in September.
In Greece, a senior finance ministry official stated that nation needs to gather an additional €2 billion in savings over the next two years to meet targets under its EU/IMF bailout, taking the austerity bill to €13.5 billion for next two years from previous €11.5 billion.
In economic news, the German leading economic index declined for the third consecutive month by 0.8% (MoM) to 103.2 in June, compared to a 0.4% drop in May. Additionally, the coincident economic index fell by 0.1% to 107.0 in June.
In the Asian session, at GMT0300, the pair is trading at 1.2464, with the EUR trading flat from yesterday’s close.
The pair is expected to find support at 1.2381, and a fall through could take it to the next support level of 1.2297. The pair is expected to find its first resistance at 1.2518, and a rise through could take it to the next resistance level of 1.2571.
In the day ahead, the Euro is expected to take cues from the outcome of Greek Prime Minister, Antonis Samaras and Euro-zone Chief, Jean-Claude Juncker meeting.
The currency pair is trading just above its 20 Hr moving average and well above its 50 Hr moving average.