EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose marginally against the USD and closed at 1.2689.
The Euro rose following news that Greece created a coalition government headed by Antonis Samaras of the New Democracy party. The party formed coalition government with socialist party Pasok and the Democratic Left party.
However, gains were limited as German Chancellor, Angela Merkel, stated that there were “no concrete plans” for the EU bailout funds to buy the bonds of struggling countries to drive down their borrowing costs.
In economic news, the producer price index in Germany fell 0.3% (MoM) in May, compared to a 0.2% increase posted in April. Market had expected a 0.2% decrease in May.
Separately, Italian industrial orders fell more-than-expected by 12.3% (YoY) in April, compared to the market expectation of 8.6% contraction.
In a bond auction, Germany raised €4.005 billion, with the average yield increased to 0.10%, up from a record-low two-year borrowing cost of 0.07% at the previous auction May 23.
Meanwhile, the Federal Reserve announced no plans to stimulate the economy via quantitative easing. However, it stated it would expand its “Operation Twist” to extend the maturities of assets on its balance sheet and it stands ready to take further action to put unemployed Americans back to work.
In the Asian session, at GMT0300, the pair is trading at 1.2674, with the EUR trading 0.12% lower from yesterday’s close.
The pair is expected to find support at 1.2627, and a fall through could take it to the next support level of 1.2580. The pair is expected to find its first resistance at 1.2732, and a rise through could take it to the next resistance level of 1.2790.
Trading trends in the pair today are expected to be determined by the release of Purchasing Manager Index (PMI) in Germany, France and Euro-zone. The Euro is also expected to take cues from the Spanish bond auction later in a day.
The currency pair is trading below its 20 Hr and converging with its 50 Hr moving average.
