EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined marginally against the USD and closed at 1.3291, after the World Bank trimmed its 2013 Euro-zone growth forecast, prompting investors to sell the Euro and shore-up dollar positions.
Additionally, the German Economy Ministry indicated that the nation’s economy would grow just 0.4% in 2013, down from its previous forecast for 1% growth.
However, the Euro contained its losses for brief period, after the European Central Bank policymaker, Ewald Nowotny, in contrast with the Euro-group Chairman Jean-Claude Juncker’s comments, that the euro was “dangerously high”, stated that the current exchange rate of the Euro against the Dollar is not a concern for him and he does not expect the currency to keep appreciating in the longer term.
In a key development, the International Monetary Fund (IMF) decided to disburse €3.24 billion of bailout money to Greece after the Euro member successfully carried out a bond buyback and passed further budget measures to ease the country’s debt load.
In the Euro-zone, consumer price inflation remained unchanged at 2.2% annually in December, in line with initial estimates. Meanwhile, core inflation edged up to 1.5% in December, from 1.4% in November.
Meanwhile in the US, the latest Federal Reserve’s (Fed) Beige Book survey found that the US economy improved at the end of 2012. It indicated that activity across all 12 districts expanded at a modest or moderate pace in December 2012 and early January 2013.
In the Asian session, at GMT0400, the pair is trading at 1.3284, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.3252, and a fall through could take it to the next support level of 1.3221. The pair is expected to find its first resistance at 1.3320, and a rise through could take it to the next resistance level of 1.3357.
In Europe, the much awaited ECB monthly report is due for release later today. Meanwhile, in the US investor look forward to the housing starts, building permits and initial jobless claims data.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
