EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 0.86% against the USD and closed at 1.0596 on Friday.
In economic news, the Euro-zone’s final Markit services PMI was revised slightly lower to a level of 55.5 in February, compared to a preliminary print of 55.6. The PMI had recorded a level of 53.7 in the prior month. On the other hand, the region’s retail sales fell for a third straight month, after it unexpectedly dropped 0.1% MoM in January, compared to market expectations for an advance of 0.3%, indicating that a recent surge in inflation may be crimping the region’s consumer spending. Retail sales had recorded a revised drop of 0.5% in the previous month.
Separately, growth in Germany’s services sector was confirmed at 54.4 in February, painting a bright picture of the Euro-zone’s largest economy. In the previous month, the PMI had registered a level of 53.4. In contrast, the nation’s retail sales surprisingly dropped 0.8% on a monthly basis in January, compared to investor consensus for a rise of 0.3%. In the previous month, retail sales had recorded a revised flat reading.
In the US, the Federal Reserve Chairwoman, Janet Yellen, dropped strong hints that a rate hike would come at the next meeting. She stated that an interest rate increase “would likely be appropriate” if the central bank judges that data on employment and inflation are continuing to move in line with expectations. She further added that the process of scaling back accommodation will not be as slow as it was in 2015 and 2016.
In economic news, the US ISM non-manufacturing PMI unexpectedly rose to a level of 57.6 in February, expanding at its fastest pace in nearly two years, signalling momentum in the economy’s biggest sector. In the prior month, the PMI had recorded a level of 56.5, while market participants expected an unchanged reading. Meanwhile, the nation’s final Markit services PMI surprisingly eased to a level of 53.8 in February, compared to a level of 55.6 in the prior month. Market participants had anticipated the PMI to drop to a level of 54.0, while the preliminary figures had recorded a level of 53.9.
In the Asian session, at GMT0400, the pair is trading at 1.0605, with the EUR trading 0.08% higher against the USD from Friday’s close.
The pair is expected to find support at 1.0535, and a fall through could take it to the next support level of 1.0465. The pair is expected to find its first resistance at 1.0649, and a rise through could take it to the next resistance level of 1.0693.
Going ahead, traders would look forward to the Euro-zone’s Sentix investor confidence index for March and German construction PMI for February, scheduled to release in a few hours. Moreover, the US factory orders and final durable goods orders, both for January, slated to release later in the day, will garner significant amount of investor attention.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
