EUR/USD: Euro-zone’s economic sentiment at a more than a decade high level in September


EURUSD Movement

For the 24 hours to 23:00 GMT, the EUR rose 0.31% against the USD and closed at 1.1781, after data indicated that the Euro-zone’s final consumer confidence index climbed to a sixteen-year high level of -1.2 in September, confirming the preliminary print and following a level of -1.5 in the prior month.

Further, the region’s economic confidence index jumped to a more than ten-year high level of 113.0 in September, indicating that businesses and households are growing more upbeat about the region’s growth prospects. The index had recorded a reading of 111.9 in the previous month, while markets were expecting for a rise to a level of 112.0.

Separately, Germany’s flash consumer price index (CPI) rose 1.8% YoY in September, at par with market expectations and following a similar rise in the prior month. On the other hand, the nation’s GfK consumer confidence index registered an unexpected drop to a level of 10.8 in October, defying market consensus for an increase to a level of 11.0 and following a level of 10.9 in the prior month.

In the US, data indicated that the final annualised gross domestic product (GDP) was revised higher to 3.1% in the second quarter of 2017, accelerating at its quickest pace in more than two years, while the preliminary figures had indicated an expansion of 3.0%. The nation’s GDP had posted a revised advance of 1.2% in the previous quarter. Further, the nation’s preliminary wholesale inventories recorded a rise of 1.0% on a monthly basis in August, beating market expectations for an advance of 0.4%. In the previous month, wholesale inventories had climbed 0.6%.

Other economic data showed that advance goods trade deficit in the US surprisingly narrowed to a level of $62.9 billion in August, after reporting a revised deficit of $63.9 billion in the previous month, while investors had envisaged the trade deficit to expand to a level of $65.1 billion. On the contrary, the nation’s initial jobless claims climbed more-than anticipated to a level of 272.0K in the week ended 23 September, compared to a revised level of 260.0K in the prior week, while markets had anticipated for an advance to a level of 270.0K.

In the Asian session, at GMT0300, the pair is trading at 1.1779, with the EUR trading slightly lower against the USD from yesterday’s close.

The pair is expected to find support at 1.1732, and a fall through could take it to the next support level of 1.1685. The pair is expected to find its first resistance at 1.1815, and a rise through could take it to the next resistance level of 1.1851.

Going ahead, investors will focus on the Euro-zone’s flash inflation numbers for September along with Germany’s unemployment rate for September and retail sales for August, all slated to release in a few hours. Later today, traders would eye the US personal income as well as spending data for August and the final Michigan consumer confidence index for September.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

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