For the 24 hours to 23:00 GMT, the EUR rose 0.64% against the USD and closed at 1.1926 on Friday, after recent data showed that German business morale surged to a record high in November.
The Ifo business climate index in Germany unexpectedly advanced to a record high level of 117.5 in November, suggesting that firms are gaining increased confidence over the robust momentum in the Euro-zone’s largest economy. In the prior month, the index had recorded a revised level of 116.8, while markets had expected for a drop to a level of 116.7. Moreover, the nation’s Ifo business expectations index surprised to the upside, jumping to a level of 111.0 in November, and defying market consensus for a fall to a level of 108.8. The index had recorded a revised level of 109.2 in the previous month.
On the other hand, the nation’s Ifo current assessment index registered an unexpected drop to a level of 124.4 in November, compared to a reading of 124.8 in the previous month.
The common currency got further boost, on the back of news that Germany’s Social Democrats’ agreed to hold talks with Chancellor, Angela Merkel on resolving the political crisis by renewing their outgoing coalition government.
Macroeconomic data released in the US indicated that the flash Markit services PMI unexpectedly eased to a four-month low level of 54.7 in November, against market expectations for the index to remain steady at a level of 55.3 registered in the previous month. Further, the nation’s preliminary Markit manufacturing PMI surprisingly declined to a level of 53.8 in November, expanding at its weakest pace in two months. The PMI had registered a level of 54.6 in the prior month, while investors had envisaged for a rise to a level of 55.0.
In the Asian session, at GMT0400, the pair is trading at 1.1926, with the EUR trading flat against the USD from Friday’s close.
The pair is expected to find support at 1.1861, and a fall through could take it to the next support level of 1.1795. The pair is expected to find its first resistance at 1.1968, and a rise through could take it to the next resistance level of 1.2009.
Ahead in the day, investors would look forward to the release of Italy’s consumer confidence index for November. Moreover, the US new home sales data for October, due to release later in the day, will also attract a lot of market attention.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.