EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined marginally against the USD and closed at 1.2569.
The Euro came under pressure, after ratings agency, Fitch, downgraded Spain’s credit rating by three notches to ‘BBB’ from ‘A’, with a negative outlook.
Initially, the Euro rose after bond auctions in Spain and France met with robust investor demand. In French bond auction, treasury raised a total €7.8 billion ($9.7 billion), with €3.5 billion of that coming from the issue of 10-year bonds, at a yield of 2.46% for the 10-year notes, down from 2.96 % from a month ago. Separately, the Spanish Treasury sold €2.288 billion of two-, four- and ten-year government debt earlier in the day, above the full targeted amount of €2 billion, though at a higher yield.
Additionally, the Euro was also boosted, after German Chancellor, Angela Merkel, stated that she would work towards a reinforced political union in Europe and the nation is ready to back the use of existing Euro-zone instruments to help stabilize the currency.
In economic news, in France, ILO unemployment rate rose to 10.0% in the first quarter of 2012, against the market expectation of 9.9%.
In the Asian session, at GMT0300, the pair is trading at 1.2528, with the EUR trading 0.33% lower from yesterday’s close.
The pair is expected to find support at 1.2486, and a fall through could take it to the next support level of 1.2444. The pair is expected to find its first resistance at 1.2597, and a rise through could take it to the next resistance level of 1.2667.
Trading trends in the pair today are expected to be determined by the release of German trade balance data.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
