EURUSD Movement
For the 24 hours to 23:00 GMT on Friday, EUR rose 0.79% against the USD and closed at 1.2976, as investor risk appetite was boosted by better-than-expected German economic data. Moreover, the Euro also gained after Greece indicated that the International Monetary Fund had relaxed its debt-cutting target for the country, suggesting lenders were closer to a deal for a vital aid tranche to be paid.
Over the weekend, pro-independence parties in Catalonia won a regional vote, strengthening a drive for a referendum on secession in defiance of Spanish Prime Minister, Mariano Rajoy. He stated that a referendum on secession is unconstitutional.
On the economic front, Germany’s IFO – business climate index rose to a reading of 101.4 in November, while the current conditions index rose to 108.1 in November. Also, the expectations index stood at a reading of 95.2 in November, compared to a forecast of 93.2. Separately, the seasonally adjusted gross domestic product rose 0.2% (QoQ) in the Q3 FY2012, unrevised from the preliminary estimate, while exports of goods and services climbed 1.4% (QoQ) in Q3 FY2012 and imports rose 1.0% (QoQ) Q3 FY2012. In France, the business confidence index rose to 88.0 in November, compared to a reading of 85.0 in October.
Moreover, Spanish producer price inflation eased to 3.5% (YoY) in October, while in Italy retail sales rose 0.1% (MoM) in September, compared to a flat reading recorded in the previous month.
In the Asian session, at GMT0400, the pair is trading at 1.2959, with the EUR trading 0.13% lower from Friday’s close.
The pair is expected to find support at 1.2892, and a fall through could take it to the next support level of 1.2826. The pair is expected to find its first resistance at 1.3008, and a rise through could take it to the next resistance level of 1.3058.
Trading trends in the pair today are expected to be determined by the release of Gfk consumer confidence survey in Germany. Investors would also eye today’s meeting of the Euro-group of finance ministers to discuss unlocking Greece’s next aid installment. Earlier last week, Germany Chancellor, Angela Merkel, stated that she was confident that a deal could be reached, while the French finance minister stated that an agreement was close. US economic releases include Dallas Fed manufacturing business index and Chicago Fed national activity index.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
