EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.13% against the USD and closed at 1.2373, amid renewed concern over the Euro-zone debt crisis following weak economic data from the region and after the Bank of France (BoF) stated that France is headed back into recession.
Yesterday, the BoF predicted a 0.1% contraction in France’s gross domestic product for the third quarter of 2012, adding to signs that Europe’s economic prospects are worsening.
Additionally, French trade deficit widened to €5.99 billion in June, from a revised deficit of €5.47 billion in May. Market had expected a deficit of €5.00 billion. Also, the business sentiment index in France retreated to 90.0 in July, from 91.0 in June.
In Germany, industrial production, on a seasonally adjusted basis, fell 0.9% in June, compared to a rise of 1.7% in May. Additionally, imports and exports fell 3.0% (MoM) and 1.5% (MoM), respectively, in June. Moreover, the trade surplus rose to €17.9 billion in June, compared to a surplus of €15.6 billion in May, while current account surplus widened to €16.5 billion in June.
Industrial output in Spain declined 6.3% (YoY) in June, compared to a revised 6.5% drop in May.
In a bond auction, Germany raised €3.4 billion from sale of its July 2022 at an average yield of 1.42%, slightly higher than 1.31% in the previous sale on July 11.
Meanwhile, the European Central Bank (ECB) warned that debt crisis hitting the 17 countries that use the Euro is causing the region’s financial market to become increasingly fragmented.
Yesterday, Fitch Ratings kept Germany rated at triple-A with a stable outlook, citing there is no immediate risk of Germany losing its top credit rating.
In the Asian session, at GMT0300, the pair is trading at 1.2382, with the EUR trading 0.07% higher from yesterday’s close.
The pair is expected to find support at 1.2338, and a fall through could take it to the next support level of 1.2295. The pair is expected to find its first resistance at 1.2414, and a rise through could take it to the next resistance level of 1.2447.
Trading trends in the pair today are expected to be determined by the release of ECB August monthly report.
The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.
