EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.41% against the USD and closed at 1.2782, as greenback came under pressure on disappointing economic data in the US.
In the US, the Philly Fed index of current activity retreated to -10.7 in November, from 5.7 in October. Moreover, the business conditions index rose to -5.2 in November, from a reading of -6.2 in October, but remained in contraction territory for the fourth consecutive month. Separately, the consumer price index rose 0.1% (MoM) in October, following a 0.6% rise in the previous month. Also, in the week ended November 10, jobless claims rose to 439,000, compared to the previous week’s revised figure of 361,000. Additionally, for the week ended November 3, continuing claims rose to 3.334 million, compared to the previous week’s revised level of 3.163 million.
Meanwhile, the Federal Reserve Chairman, Ben Bernanke stated that the Fed remains “quite concerned” about unemployment and that the US housing market remains a “critical challenge” for the country. He indicated that the Fed would take action to speed growth and a rebound in a housing market facing obstacles from too-tight lending rules. Separately, the Federal Reserve Bank of Dallas President, Richard Fisher cautioned that that Congress needs to get its fiscal house in order, and added the Federal Reserve would not bail out legislators if they fail.
Earlier in European trading hours, economic data indicated that Euro-zone economy contracted by 0.1% in the third quarter, less than the expected 0.2% contraction and following a 0.2% fall in the previous quarter. Additionally, the seasonally adjusted sequential gross domestic product (GDP) in Germany rose 0.2% in Q3 FY2012. Meanwhile, the French economy expanded 0.2% (QoQ) in the Q3 FY2012.
The European Central Bank (ECB), in its monthly report has indicated that it expects Euro-zone growth momentum to remain weak in 2013 and assures that it would continue supporting it with standard and non-standard monetary policy measures. It further added that the necessary process of balance sheet adjustment in the financial and nonfinancial sectors and an uneven global recovery will continue to dampen the pace of recovery.
In the Asian session, at GMT0400, the pair is trading at 1.2771, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.2734, and a fall through could take it to the next support level of 1.2698. The pair is expected to find its first resistance at 1.2804, and a rise through could take it to the next resistance level of 1.2838.
Trading trends in the pair today are expected to be determined by the release of current account and trade balance data in the Euro-zone. Investors also await the industrial production data in the US.
The currency pair is trading between its 20 Hr and 50 Hr moving averages.
