EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.74% against the USD and closed at 1.2994.
Yesterday, the US dollar plunged after the Federal Reserve launched quantitative easing (QE3) with a new round of bond buying, citing that it would buy $40 billion of mortgage debt per month and continue to purchase assets until the outlook for jobs improves substantially. The central bank also extended a plan to keep short-term interest rates at record-low levels of 0.00 to 0.25% at least through mid-2015.
The German President, Joachim Gauck, signed the €500-billion ($646-billion) Euro-zone bailout fund, a day after Germany’s Federal Constitutional Court rejected calls to blocking the measures.
Separately, the Greece Finance Minister, Yannis Stournaras rejected that Greece needs a third bailout after the country’s representative to the International Monetary Fund, Thanos Catsambas, stated that Greece would need a third bailout package from its creditors to overcome its budget gap.
Meanwhile, in a bond auction, the Italy’s Treasury sold €4.0 billion worth of three-year government bonds at an average yield of 2.75%, sharply down from 4.65% at a similar auction last month. Italy sold an additional €1.5 billion of five-year debt at an average yield of 3.71%, down from 4.73% at a similar auction last month.
The European Central Bank (ECB) Policymaker, Joerg Asmussen, stated a Greek exit from the Euro-zone could be a “very expense path” for the country, for Europe and also for Germany, citing it should not be talked about lightly.
On the economic front, consumer prices in Italy rose 0.4% (MoM) in August, in line with preliminary estimates, and compared to a 0.1% rise in July. Meanwhile, in Greece unemployment rate climbed to 23.6% in the second quarter of 2012, from 22.6% in the first quarter.
In the Asian session, at GMT0300, the pair is trading at 1.3011, with the EUR trading 0.13% higher from yesterday’s close.
The pair is expected to find support at 1.2907, and a fall through could take it to the next support level of 1.2804. The pair is expected to find its first resistance at 1.3065, and a rise through could take it to the next resistance level of 1.3120.
Trading trends in the pair today are expected to be determined by the Euro-zone consumer price index and employment change data.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
