EURUSD Movement
For the 24 hours to 23:00 GMT on Friday, EUR declined 0.30% against the USD and closed at 1.2743, after current account surplus in the Euro-zone narrowed to a seasonally adjusted €0.8 billion in September, from €10.9 billion recorded in the previous month. Meanwhile, on a seasonally adjusted basis trade surplus widened to €11.3 billion in September, compared to a surplus €8.9 billion recorded in the previous month.
Separately, the European Central Bank Governing Council member, Jens Weidmann, stated that Greece might need another debt haircut at the end of its current fiscal consolidation and reform program.
Moreover, the greenback was bolstered as a decline in the US industrial production prompted investors to avoid riskier assets and seek safety in the US Dollar. In the US economic news, industrial production fell 0.4% in October, following a downwardly revised 0.2% gain in September.
Meanwhile, the Federal Reserve Bank of Atlanta President, Dennis Lockhart stated that forceful central bank policies would remain needed to spur job growth even if Congress averts sudden tax increases and spending cuts at the end of the year.
During the weekend, the Federal Reserve Treasury Secretary, Timothy Geithner, expressed confidence that an agreement on averting the fiscal cliff can be concluded within weeks after talks between President Barack Obama and congressional leaders went well.
In the Asian session, at GMT0400, the pair is trading at 1.2760, with the EUR trading 0.13% higher from Friday’s close, as investors speculated that Tuesday’s meeting of Euro-zone finance ministers could lead to fresh bailout money flowing into Greek treasuries. Hopes that the US policymakers would steer the economy away from a fast-approaching fiscal cliff also enticed investors out of the safety of the greenback.
The pair is expected to find support at 1.2708, and a fall through could take it to the next support level of 1.2655. The pair is expected to find its first resistance at 1.2795, and a rise through could take it to the next resistance level of 1.2830.
Trading trends in the pair today are expected to be determined by the release of construction output in the Euro-zone. Meanwhile, investors also eye the existing home sales data in the US.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
