EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.36% against the USD and closed at 1.2812. Yesterday, the Euro-group President, Jean-Claude Juncker, stated that Euro-zone finance ministers have made progress on a package of measures to reduce Greek public debt. However, he added that the Euro-group interrupted its meeting and would continue on November 26, to allow it for further technical work on some elements of the package.
Adding to positive sentiment, the International Monetary Fund, the European Central Bank and the European Union stated in a joint statement, that the Portugal’s economic recovery program is broadly on track, despite stronger headwinds to growth. Furthermore, Spain saw borrowing costs ease slightly at an auction of 12-month government bonds.
The greenback was pressured after the Federal Reserve Chairman, Ben Bernanke, stated that the automatic tax increases and spending cuts currently set to go into effect at the end of the year would pose a substantial threat to the economic recovery. He also indicated that the Fed could not do much to minimize the damage from a failure to deal with the crisis.
Meanwhile, the Federal Reserve Bank of Richmond President, Jeffrey Lacker stated that he opposes a proposal to tie central bank stimulus to the US unemployment rate because such a move may spur inflation.
In the US economic news, housing starts increased 3.6% to a seasonally adjusted annual rate of 894,000 in October, compared to the revised September estimate of 863,000. Meanwhile, building permits fell 2.7% to a seasonally adjusted annual rate of 866,000 in October. Also, the NAHB/Wells Fargo housing market index surged to 46.0 in November, from 41.0 in October.
In the Asian session, at GMT0400, the pair is trading at 1.2749, with the EUR trading 0.49% lower from yesterday’s close.
The pair is expected to find support at 1.2714, and a fall through could take it to the next support level of 1.2679. The pair is expected to find its first resistance at 1.2807, and a rise through could take it to the next resistance level of 1.2865.
Trading trends in the pair today are expected to be determined by the release of the MBA mortgage applications, initial jobless claims, Reuters/Michigan consumer sentiment index and leading indicator data in the US.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
