EURUSD Movement
For the 24 hours to 23:00 GMT on Friday, EUR declined 0.24% against the USD and closed at 1.3216, amid poor French and Spanish economic data and disappointing Italian bond auction.
In French economic news, the gross domestic product expanded 0.1% (QoQ) in the Q3 FY2012, compared to a 0.2% expansion previously estimated. However, consumer spending in France rose 0.2% in November, compared to a revised 0.1% fall in the previous month. Market had expected spending to remain unchanged. Separately, Spanish retail sales retreated 7.8% (YoY) in November, after declining 9.7% in the previous month. Additionally, the domestic producer price index (PPI) in Italy rose 2.2% (YoY) in November, slower than a 2.6% rise in October. The overall PPI rose 2.0% annually, compared to a 2.3% increase in the previous month.
Over the weekend, the German Chancellor, Angela Merkel stated that he Euro-zone sovereign debt crisis is far from over even though reform measures designed to address the roots of the problem are beginning to bear fruit.
The Euro also came under pressure, after Italy saw borrowing costs edge higher at an auction of five- and- ten-year government bonds, amid uncertainty ahead of national elections in February. It sold €3 billion of 10-year bonds at an average yield of 4.48%, up from 4.45% last month. The country also auctioned €2.87 billion of five-year debt at a yield of 3.26%, compared to 3.23% a month earlier.
Meanwhile, on Sunday, the US President, Barack Obama warned lawmakers that they must reach a deal on taxes and spending cuts or risk the consequences to the US economy.
In the US, the Chicago business barometer rose to 51.6 in December, against the expectations for a rise to 51.0 and following a reading of 50.4 in November. Also, the pending home sales index climbed 1.7% (MoM) in November, from a downwardly revised rise of 5.0% in October.
In the Asian session, at GMT0400, the pair is trading at 1.3198, with the EUR trading 0.14% lower from Friday’s close.
The pair is expected to find support at 1.3157, and a fall through could take it to the next support level of 1.3116. The pair is expected to find its first resistance at 1.3248, and a rise through could take it to the next resistance level of 1.3298.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
