EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 0.15% against the USD and closed at 1.2337, after Germany’s Social Democrats decisively voted to form a grand coalition with Angela Merkel’s conservatives, thereby ending a prolonged period of political uncertainty in the Euro-bloc’s largest economy.
In economic news, the Euro-zone’s final Markit services PMI dropped more than initially estimated to a level of 56.2 in February, while the preliminary print had indicated a fall to a level of 56.7. In the prior month, the PMI had registered a reading of 58.0. Additionally, the region’s seasonally adjusted retail sales eased 0.1% on a monthly basis in January, meeting market expectations and declining for the second straight month. Retail sales had registered a revised drop of 1.0% in the prior month.
In other economic news, the region’s Sentix investor confidence index fell more-than-anticipated to a level of 24.0 in March, as political uncertainty in German and Italy weighed on investors’ morale. In the prior month, the index had registered a level of 31.9, while market participants had envisaged for a fall to a level of 30.9.
Separately, activity in Germany’s services sector eased to a 3-month low level of 55.3 in February, confirming the flash estimate. In the prior month, the PMI had registered a reading of 57.3.
Macroeconomic data released in the US showed that the ISM non-manufacturing PMI declined less-than-expected to a level of 59.5 in February, after recording a 12-year high level of 59.9 in the previous month, while markets had expected for a drop to a level of 59.0.
On the contrary, the nation’s final Markit services PMI climbed to a 6-month high level of 55.9 in February, meeting the preliminary print. The PMI had registered a level of 53.3 in the prior month.
In the Asian session, at GMT0400, the pair is trading at 1.2350, with the EUR trading 0.11% higher against the USD from yesterday’s close.
The pair is expected to find support at 1.2292, and a fall through could take it to the next support level of 1.2233. The pair is expected to find its first resistance at 1.2386, and a rise through could take it to the next resistance level of 1.2421.
Moving ahead, investors would direct their attention to Germany’s Markit construction PMI for February, scheduled to release in a few hours. Further, the US factory orders as well as final durable goods orders for January, due to release later today, will be on investors’ radar.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
