EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.12% against the USD and closed at 1.2721, as rising concern that Greece might be expelled from the Euro bloc overshadowed better-than-expected French and German bond auctions.
The Euro also came under pressure, after European Central Bank (ECB) stated that it would temporarily stop lending to some Greek banks as they have not been successfully recapitalized. Additionally, International Monetary Fund (IMF), Chief, Christine Lagarde, warned that Greek departure from the euro “would be extremely expensive and hard, and not just for Greece”, while World Bank stated that the crisis could spread beyond Greek borders to far bigger Euro-zone economies that are in trouble.
However, the Euro recouped some of its losses, supported by comments from German Chancellor, Angela Merkel, who said that she wants to see Greece stay in the currency bloc. Similar sentiment was echoed by European Central Bank President, Mario Draghi, who stated that the central bank would strongly prefer Greece to remain in the currency bloc.
In a bond auction, Germany sold €4.107 billion of July 2022 bund at an average yield of 1.47%, the lowest on record for the sale of 10-year German debt. Meanwhile, France also saw its borrowing costs fall yesterday.
On the economic front, consumer price index in the Euro-zone rose 2.6% (YoY) in April, in line with market expectations. Separately, trade surplus in the Euro-zone rose to €8.6 billion in March, from €2.3 billion in February, well above the forecast of €4.0 billion.
In the Asian session, at GMT0300, the pair is trading at 1.2741, with the EUR trading 0.15% higher from yesterday’s close.
The pair is expected to find support at 1.2695, and a fall through could take it to the next support level of 1.265. The pair is expected to find its first resistance at 1.2773, and a rise through could take it to the next resistance level of 1.2805.
The currency pair is trading between its 20 Hr and 50 Hr moving averages.
