EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.51% against the USD and closed at 1.3054.
The Euro initially came under pressure, after the outcome of elections in Greece and France during the weekend, threatened to derail the region’s plan to tackle its debt crisis.
In Greece, neither of the two pro-bailout parties secured enough votes to form a majority in parliament, as voters favored smaller parties who had campaigned against the government austerity program, while in France, President Nicolas Sarkozy was defeated by socialist candidate, Francois Hollande, who has promised to rework the debt deals.
On the economic front, Euro-zone Sentix investor confidence index fell more-than-expected to -24.5 in May, against the market expectation of -15.7, making it lowest level since July 2009.
Additionally, the construction purchasing managers’ index in Germany declined to 49.8 in April, from 55.7 in March.
Renewed fears over the stability of the Euro-zone made the currency break below the psychological support level of $1.30 during the session.
However, Euro recovered later on, buoyed by Germany’s optimism that close cooperation would be possible with the new administrations and after Spanish Prime Minister, Mariano Rajoy announced a new declaration to support Spanish banks.
Additionally, Euro received support after German factory orders grew 2.2% March, against the market expectation of 0.5% growth. Also, Federal Reserve Bank of Richmond President Jeffrey Lacker stated that Europe would slowly recover from its financial crisis.
In the Asian session, at GMT0300, the pair is trading at 1.3031, with the EUR trading 0.17% lower from yesterday’s close.
The pair is expected to find support at 1.2981, and a fall through could take it to the next support level of 1.2931. The pair is expected to find its first resistance at 1.3074, and a rise through could take it to the next resistance level of 1.3116.
Trading trends in the pair today are expected to be determined by the release of German industrial production.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
