EURUSD Movement
For the 24 hours to 23:00 GMT on Friday, EUR declined 0.49% against the USD and closed at 1.2507, as dismal economic data from Germany and Italy added to Euro-zone recession concerns.
The Euro took a hit, after Italian industrial production fell far more-than-expected by 1.9% (MoM) in April, against the market expectation of 0.5% drop. Adding to concerns, German trade surplus narrowed to €14.4 billion in April, from €17.4 billion surplus in March. However, current account surplus in Germany stood at €11.2 billion in April, against the expectations of a €11.0 billion surplus. In France, trade deficit widened to €5.8 billion in April, following a €5.6 billion deficit in March. Additionally, the business sentiment index retreated to a reading of 93.0 in May, compared to a reading of 94.0 in April.
Meanwhile, the German central bank, Bundesbank, revised its forecast for German GDP to 1.0% in 2012, from its previous forecast in December for a growth rate of 0.6%. For 2013, growth is seen at 1.6%, down from the prior projection of 1.8%.
In the Asian session, at GMT0300, the pair is trading at 1.2628, with the EUR trading 0.97% higher from Friday’s close, after Euro-zone Finance Ministers, over the weekend, decided to lend Spain up to €100 billion ($125 billion) to help the nation to recapitalize its banks.
The pair is expected to find support at 1.2486, and a fall through could take it to the next support level of 1.2344. The pair is expected to find its first resistance at 1.2719, and a rise through could take it to the next resistance level of 1.2811.
Trading trends in the pair today are expected to be determined by the release of French industrial production and Italian gross domestic product (GDP).
The currency pair is trading well above its 20 Hr and 50 Hr moving averages.
