EUR/USD: Euro-zone’s annual inflation confirmed at a 4-year high level in February


EURUSD Movement

For the 24 hours to 23:00 GMT, the EUR rose 0.38% against the USD and closed at 1.0771, after the Dutch Prime Minister, Mark Rutte’s party won over anti-Islam lawmaker, Geert Wilders, in an election that many viewed as a defeat for the forces of political populism.

The Euro was boosted further, after the Euro-zone’s final consumer price index (CPI) climbed 2.0% on an annual basis in February, confirming the preliminary print and maintaining its highest level in four-years. The CPI had registered a rise of 1.8% in the previous month.

The greenback lost ground against most of its key peers, as the US Federal Reserve’s slightly cautious tone continued to weigh on investor sentiment.

In economic news, housing starts in the US jumped 3.0% on a monthly basis, to an annual rate of 1288.0K in February, climbing to a four-month high level, as unseasonably warm weather boosted the pace of single-family homebuilding to its strongest level in nearly a decade. Investors had envisaged housing starts to rise to a level of 1264.0K, following a revised level of 1251.0K in the prior month. On the other hand, the nation’s building permits fell more-than-expected by 6.2% MoM, to an annual rate of 1213.0K in February, compared to market expectations of a fall to a level of 1268.0K and following a revised level of 1293.0K in the prior month.

Other economic data revealed that the number of Americans filing for fresh jobless claims eased to a level of 241.0K in the week ended 11 March 2017, compared to market consensus for a drop to a level of 240.0K and following a level of 243.0K in the prior week. Further, the nation’s JOLTS job openings rose to a level of 5626.0K in January, after recording a revised reading of 5539.0K in the prior month, while markets anticipated an advance to a level of 5556.0K.

In the Asian session, at GMT0400, the pair is trading at 1.0772, with the EUR trading marginally higher against the USD from yesterday’s close.

The pair is expected to find support at 1.0726, and a fall through could take it to the next support level of 1.0680. The pair is expected to find its first resistance at 1.0796, and a rise through could take it to the next resistance level of 1.0820.

Going ahead, investors will keep a close watch on the Euro-zone’s trade balance and construction output data, both for January, slated to release in a few hours. Moreover, in the US the flash Michigan consumer confidence index for March, along with industrial as well as manufacturing production data, both for February, will keep investors on their toes.

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

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