EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.24% against the USD and closed at 1.2534.
Yesterday, the US dollar rose amid positive economic data from the US and after the Federal Reserve in its Beige Book economic survey cited that the US economy continues to recover.
Meanwhile, the Euro came under pressure, after the German Chancellor, Angela Merkel and the Italian Prime Minister, Mario Monti publicly disagreed on whether the Euro area’s bailout fund should get a bank license to boost its bond-buying capacity.
Separately, the European Central Bank (ECB) President, Mario Draghi, hit back at German criticism of his plan to intervene in bond markets and added the central bank would always act within the limits of its mandate.
In a bond auction, Italy sold €9 billion of six-month T-bills at an average yield of 1.585%, much lower than the 2.454% on July 27.
On the economic front, in Germany, consumer price index rose 2.0% (YoY) in August, up from 1.7% in July. Separately, the harmonized index of consumer pricesrose 2.2% (YoY) in August, following 1.9% in July. In France, the business confidence indicator rose to a reading of 90.0 in August, from a revised reading of 89.0 in July. Separately, in Italy, on a seasonally adjusted monthly basis, retail sales climbed 0.4% in June, while consumer confidence declined to a reading of 86.0 in August.
In the Asian session, at GMT0300, the pair is trading at 1.2538, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.2513, and a fall through could take it to the next support level of 1.2489. The pair is expected to find its first resistance at 1.2568, and a rise through could take it to the next resistance level of 1.2599.
Trading trends in the pair today are expected to be determined by the release of Euro-zone consumer confidence and industrial confidence along with German unemployment data.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
