EUR/USD: Euro-zone’s services sector grew more than initially estimated in December


EURUSD Movement

For the 24 hours to 23:00 GMT, the EUR rose 0.48% against the USD and closed at 1.2071, as robust services sector data across the Euro-zone indicated that recovery in the common currency region continues to proceed at an accelerated pace.

On the macro front, the Euro-zone’s final Markit services PMI was revised higher to a level of 56.6 in December, notching its highest level since February 2011. The preliminary figures had recorded an advance to a level of 56.5, compared to a reading of 56.2 registered in the previous month.

Separately, Germany’s final Markit services PMI was confirmed at a level of 55.8 in December, remaining at a 24-month high level. In the prior month, the PMI had recorded a level of 54.3.

The US Dollar depreciated against its major peers, as optimism over upbeat US jobs report was dented by disappointing services sector data.

ADP’s private sector employment in the US advanced more-than-anticipated by 250.0K in December, adding the most number of jobs since March 2017, thus painting a bright picture of the nation’s labour market. The private sector employment had recorded a revised increase of 185.0K in the prior month, while markets had expected for a gain of 190.0K.

On the other hand, the nation’s final Markit services PMI declined to a level of 53.7 in December, reaching a seven-month low level but coming in above the flash reading of 52.4. In the prior month, the PMI had recorded a reading of 54.5. Further, the nation’s initial jobless claims recorded an unexpected rise to a level of 250.0K in the week ended 30 December, confounding market consensus for a fall to a level of 240.0K. In the previous week, initial jobless claims had recorded a revised reading of 247.0K.

In the Asian session, at GMT0400, the pair is trading at 1.2074, with the EUR trading a tad higher against the USD from yesterday’s close.

The pair is expected to find support at 1.2028, and a fall through could take it to the next support level of 1.1983. The pair is expected to find its first resistance at 1.2104, and a rise through could take it to the next resistance level of 1.2135.

Going ahead, traders would keep a close watch on the Euro-zone’s flash inflation figures for December along with Germany’s retail sales data for November and the Markit construction PMI for December, all set to release in a few hours. Later in the day, market participants would await the release of crucial US non-farm payrolls and unemployment rate data as well as the ISM non-manufacturing PMI, all for December. Moreover, the nation’s factory orders, final durable goods orders and trade balance numbers, all for November, would be on investors’ radar.

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

This entry was posted in EUR/USD. Bookmark the permalink.

Comments are closed.