EUR/USD: Eurozone GDP advanced for the third quarter, but inflation growth slowed in October


EURUSD Movement

For the 24 hours to 23:00 GMT, the EUR rose marginally against the USD and closed at 1.1649, following solid reports on the Eurozone economic growth and unemployment rate.

Data showed that the region’s GDP grew by 0.6% QoQ in the three months to September, more than market expectations for an advance of 0.5%. Additionally, the unemployment rate in the Eurozone unexpectedly dropped to 8.9%, from a revised rate 9.0% in the previous month. Market participants had called for an unchanged reading. On the other hand, the Eurozone inflation slowed in October, supporting the case for the ECB to trim its monetary stimulus only gradually. The flash consumer price index rose 1.4% on a yearly basis in October in the Euro area, compared to a rise of 1.5% in the previous month.

In the US, upbeat economic reports reinforced investor confidence and US growth prospects. US CB consumer confidence index jumped to 125.9 in October, compared to a revised reading of 120.6 in the prior month. Markets were expecting the index to advance to a level of 121.5. Also, US Chicago Fed PMI surprisingly rose to a level of 66.2 in October, compared to a reading of 65.2 in the previous month. Markets had anticipated the Chicago Fed PMI to ease to 60.0.

In the Asian session, at GMT0400, the pair is trading at 1.1632, with the EUR trading 0.15% lower from yesterday’s close.

The pair is expected to find support at 1.1618, and a fall through could take it to the next support level of 1.1603. The pair is expected to find its first resistance at 1.1654, and a rise through could take it to the next resistance level of 1.1675.

This afternoon will bring some major economic releases from the US, namely the ISM manufacturing PMI and the ADP employment change, both for October, along with weekly mortgage applications. Later in the day, the FOMC interest rate decision will be watched by investors for further direction.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

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