EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.19% against the USD and closed at 1.2510.
Yesterday, the French President, Francois Hollande, called on Europe’s leaders to make serious headway in introducing measures to ease the pressure on countries such as Spain.
Moreover, the German Finance Minister, Wolfgang Schaeuble, stated that the European Central Bank supervisor must take a hard line approach to enforce a robust rule book on Europe’s banking sector.
In Greece, the Prime Minister, Antonis Samaras stated that “painful” cuts worth €11.5 billion ($14.4 billion) were inevitable to keep the country in the Euro-zone. However, he added that a new round of austerity measures planned for the next two years would be the last for the country.
Meanwhile, the International Monetary Fund (IMF) voiced support for Greece in its efforts to overcome the economic crisis ahead of next week’s return of international inspectors overseeing its progress under a rescue program.
In a bond auction, Italy’s Treasury sold €2.5 billion worth of five-year government bonds maturing in June 2017 at an average yield of 4.73% in the day, down from 5.29% at a similar auction last month. It also sold €4.0 billion of 10-year debt maturing in November 2022 at an average yield of 5.82%, down from 5.96% at a similar auction last month.
On the economic front, unemployment in Germany increased by 9,000 in August, against the expectation of a rise by 7,000. In the Euro-zone, the economic sentiment indicator fell to 86.1 in August, from 87.9 in July, while consumer confidence index retreated to -24.6 in August, from -21.5 in July. Additionally, the industrial confidence index and services confidence index, declined to -15.3 and -10.8, respectively, in August. Moreover, business confidence rose to -1.21 in August.
Yesterday, the ratings agency, Moody’s Investors Service stated that it would continue its review of Spain’s ‘Baa3’ long-term debt rating for a possible downgrade until the end of September.
In the Asian session, at GMT0300, the pair is trading at 1.2517, with the EUR trading 0.06% higher from yesterday’s close.
The pair is expected to find support at 1.2481, and a fall through could take it to the next support level of 1.2446. The pair is expected to find its first resistance at 1.2558, and a rise through could take it to the next resistance level of 1.2600.
Trading trends in the pair today are expected to be determined by the release of Euro-zone unemployment rate and German retail sales data. Investors also await Federal Reserve Chairman, Ben Bernanke’s speech at Jackson Hole later in the day.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
