EURUSD Movement
For the 24 hours to 23:00 GMT on Friday, EUR rose 0.58% against the USD and closed at 1.2582.
The US dollar came under pressure after the US Federal Reserve Chairman, Ben Bernanke, at Jackson Hole summit expressed deep worry over the US economy, calling the situation unsatisfactory and citing labor market stagnation was “a grave concern.” Additionally, he offered no new promises of intervention to boost growth, but strongly signaled that he was leaning that way.
Meanwhile, the Euro also received support after European Central Bank (ECB) Executive Board member, Benoit Coeure stated that ECB is considering all possible options to ensure that the liquidity created by the bank reaches businesses and households.
Moreover, Germany’s finance minister, Wolfgang Schaeuble’s stated that the new European banking supervisor should limit its focus on major banks whose stability is vital to Europe’s financial security instead of monitoring all of the region’s 6,000 lenders.
Additionally, risk appetite amongst investors grew, after Spanish government on Friday approved the creation of ‘bad bank’ to absorb the most troubled real estate assets of the country’s financial institutions, helping to clear the way for Madrid to receive European rescue money for Spain’s troubled banking industry.
On the economic front, in the Euro-zone, consumer price inflation rose to 2.6% (YoY) in August, from 2.4% in July. Additionally, unemployment rate remain unchanged at 11.3% in July.
Separately, retail sales in Germany fell 0.9% (MoM) in July, against the expectations for a 0.2% rise in July. In Italy, on a monthly basis, the consumer price index rose 0.4% in August, from a reading of 0.1% in the July. While the unemployment rate, on a seasonally adjusted basis, remained unchanged at 10.7% in July.
In the Asian session, at GMT0300, the pair is trading at 1.2577, with the EUR trading marginally lower from Friday’s close.
The pair is expected to find support at 1.2501, and a fall through could take it to the next support level of 1.2426. The pair is expected to find its first resistance at 1.2645, and a rise through could take it to the next resistance level of 1.2714.
Trading trends in the pair today are expected to be determined by the release of Euro-zone, German and French purchasing manager index.
The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
