EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 1.07% against the USD and closed at 1.3106, amid reports that the Spanish government is drawing closer to an official bailout request.
Meanwhile, Michael Meister, a deputy caucus leader of Chancellor Angela Merkel’s Christian Democratic Party and Norbert Barthle, her party’s budget spokesman reportedly indicated that they would support a Spanish application for a ‘precautionary credit line’ from the European Stability Mechanism, the Euro-zone’s permanent bailout fund.
Additionally, Moody’s Investors Service confirmed Spain’s ‘Baa3’ government bond rating, but assigned a negative outlook, indicating that a downgrade is still possible in the coming months.
Separately, Spain saw borrowing costs ease slightly at an auction of 12- and 18-month government bonds.
Meanwhile on the economic front, Euro-zone’s trade surplus rose to €9.9 billion in August, from a revised €7.2 billion surplus in July. Also, the ZEW survey current situation index climbed to -1.4 points in October. Moreover, Euro-zone’s inflation was revised down to 2.6% annually in September, from the initial estimate of 2.7%, while core inflation remained unchanged at 1.5% in September.
In Germany, the ZEW indicator of economic sentiment rose to -11.5 in October, from -18.2 in September. Also, the ZEW indicator of current sentiment declined to 10.0 in October, from 12.6 in the previous month.
Separately, trade balance in Italy stood at a deficit of €598.0 million in August, compared to a surplus of €4510.0 million in July.
In the Asian session, at GMT0300, the pair is trading at 1.3093, with the EUR trading 0.10% lower from yesterday’s close.
The pair is expected to find support at 1.2993, and a fall through could take it to the next support level of 1.2893. The pair is expected to find its first resistance at 1.3159, and a rise through could take it to the next resistance level of 1.3225.
Trading trends in the pair today are expected to be determined by the release of construction output data in the Euro-zone.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
