EURUSD Movement
For the 24 hours to 23:00 GMT on Friday, EUR rose 0.27% against the USD and closed at 1.2241, as successful bond auction in Italy offset renewed concern over nation’s fiscal reforms after Moody’s downgraded country’s rating by two notches to ‘Baa2’.
The Italian treasury sold €3.5 billion of three-year bonds, matching a maximum target, at an average yield of 4.65%, lower than the 5.3% in June. The Treasury also sold €1.75 billion of three longer-dated securities.
Meanwhile, the greenback weakened amid talks that the Federal Reserve would likely to stimulate the US economy following weak US consumer sentiment data.
Earlier in a day, the Euro came under pressure after Moody’ Investors Service downgraded Italy’s sovereign rating by two notches to ‘Baa2′, citing rising risks of higher funding costs.
On the economic front, consumer price inflation in Spain remained unchanged at 1.9% in June. In France, a survey by the Bank of France showed retail sales on a seasonally and working-day adjusted basis, grew 4.3% (MoM) in June.
On Sunday, German Chancellor, Angela Merkel, stated that she was confident that a majority of German lawmakers would back aid for Spain’s ailing banking sector at a special sitting of the lower house Bundestag set for Thursday.
In the Asian session, at GMT0300, the pair is trading at 1.2240, with the EUR trading flat from Friday’s close.
The pair is expected to find support at 1.2178, and a fall through could take it to the next support level of 1.2116. The pair is expected to find its first resistance at 1.2287, and a rise through could take it to the next resistance level of 1.2334.
The pair is expected to take cues by the release of Euro-zone consumer price index and Italian trade balance data.
The currency pair is trading just above its 20 Hr and 50 Hr moving averages.
