EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.49% against the USD and closed at 1.2564, following a successful bond auctions in Italy and Spain.
In a bond auction, the Spanish treasury sold €1.67 billion worth of three-month government bonds at an average yield of 0.946%, down sharply from 2.434% at a similar auction last month. Spain also sold €1.93 billion of six-month debt at an average yield of 2.026%, down from 3.691% at a similar auction in July. Separately, Italy’s Treasury sold €3.0 billion worth of two-year government bonds maturing in May 2014 at an average yield of 3.064% earlier in the day, down from 4.860% at a similar auction last month.
On the economic front, the GfK reported that its forward-looking consumer confidence index in Germany remained unchanged at a reading of 5.9 for September. Additionally, the M3 money supply growth in the Euro-zone grew 3.8% (YoY) in July, compared to a 3.2% rise in June.
Meanwhile, the Gross Domestic Product in Spain shrank 0.4% (QoQ) in the second quarter of 2012, matching the preliminary estimate and following a 0.3% drop recorded in the previous quarter. Spanish authorities stated that its recession had deepened in the second quarter as domestic spending slumped in the wake of tough austerity measures aimed at tackling the government’s fiscal problems.
Additionally, Catalonia, Spain’s most economically important region, yesterday asked the central government for a bailout, heightening concerns about nation’s ability to raise cash.
Investors also focused on the news that European Central Bank President, Mario Draghi have cancelled his appearance at the Jackson Hole meeting, as he gears up for a critical policymaking meeting next week on September 6.
In the Asian session, at GMT0300, the pair is trading at 1.2557, with the EUR trading 0.06% lower from yesterday’s close.
The pair is expected to find support at 1.2494, and a fall through could take it to the next support level of 1.2432. The pair is expected to find its first resistance at 1.2598, and a rise through could take it to the next resistance level of 1.2640.
Trading trends in the pair today are expected to be determined by the release of German consumer price index and Italian retail sales data.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
