EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.29% against the USD and closed at 1.2596, amid hopes that the European Central Bank (ECB) would announce fresh measures to battle the Euro-zone debt crisis.
Yesterday, the Italian Prime Minister, Mario Monti, stated that the risk that Italy might suffer the same fate as debt-crisis hit Greece has eased, and economic recovery in the nation is in reach.
Meanwhile, the German Finance Minister, Wolfgang Schaeuble, stated that he believed the Euro would prove a more stable currency next year but added that its troubles would not be over.
Moreover, the Finnish Prime Minister, Jyrki Katainen, stated that Europe was fully committed to the Euro but warned that throwing money at the problem would not work, citing that the Europe needed to find a “sustainable solution” to its crippling debt crisis.
On the economic front, retail sales in the Euro-zone declined 0.2% (MoM) in July, compared to a 0.1% rise recorded in June. Separately, the services sector Purchasing Managers’ Index (PMI) declined to 47.2 in August, compared to the preliminary estimate of 47.5. Additionally, German services PMI stood at 48.3 in August, in line with the flash estimate. In France, services PMI fell to a reading of 49.2 in August, against the flash estimate of 50.2.
In a bond auction, Germany sold €3.6 billion of bonds maturing in 2022, falling short of the €5 billion target, at an average yield of 1.42%, same as paid in a 10-year auction in August.
In the Asian session, at GMT0300, the pair is trading at 1.2612, with the EUR trading 0.13% higher from yesterday’s close.
The pair is expected to find support at 1.2534, and a fall through could take it to the next support level of 1.2457. The pair is expected to find its first resistance at 1.2657, and a rise through could take it to the next resistance level of 1.2703.
In the day ahead, the ECB President, Mario Draghi is expected to declare his plans for a bond buying programme he announced in August. Investors are also eyeing Euro-zone gross domestic product and German factory orders data, due out later in the day.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
