EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.07% against the USD and closed at 1.2583, amid growing expectations that the European Central Bank (ECB) is working on measures to help stabilize the Euro-zone’s sovereign debt markets ahead of its upcoming meeting on Thursday.
Yesterday, ECB President, Mario Draghi, told officials that he would be comfortable buying three-year government bonds to bring down borrowing costs for nations in financial distress.
Moreover, German Chancellor, Angela Merkel, stated that the nation must show solidarity with Euro-zone, and indicated that she would back a more active crisis-fighting role at the ECB.
However, gains were limited as concerns over the outlook for growth in the Euro-zone weighed after data showed that the region’s manufacturing sector contracted for the 13th consecutive month in August and after Moody’s Investors Service cut European Union’s (EU) outlook to negative.
In economic news, Euro-zone Markit manufacturing purchasing managers’ (PMI) fell to 45.1 in August against the market expectation for an increase to 46.2. Additionally, in Germany manufacturing PMI fell to 44.7 compared to the reading of 45.1 in July. Separately, French and Italian manufacturing PMI fell more-than-expected to 46.0 and 43.6, respectively, in August.
In Spain, Economy Minister Luis de Guindos, stated Spain is committed to meeting its EU-agreed deficit target of 6.3% of its Gross Domestic Product in 2012 despite bad data for the first seven months of the year.
In the Asian session, at GMT0300, the pair is trading at 1.2617, with the EUR trading 0.27% higher from yesterday’s close.
The pair is expected to find support at 1.2577, and a fall through could take it to the next support level of 1.2538. The pair is expected to find its first resistance at 1.2642, and a rise through could take it to the next resistance level of 1.2668.
Trading trends in the pair today are expected to be determined by the release of Euro-zone producer price index data.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
