EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.62% against the USD and closed at 1.2864, after the Cypriot Parliament voted down a bank-deposit levy needed to secure a bailout, thereby raising fears over the stability of Euro-zone’s financial institutions.
Additionally, a member of the European Central Bank’s (ECB) governing council, Ewald Nowotny, indicated that while the Cypriot Parliament’s rejection to levy tax on the nation’s bank deposits would have minimal impact on the Euro-zone, Cyprus is expected to face major ramifications.
Moreover, in the Euro-zone’s economic news, construction output declined 7.3% in January, faster as compared to an upwardly revised 4.6% fall in the previous month. Separately, the Centre for European Economic Research (ZEW) reported that the Euro-zone economic sentiment index declined to a level of 33.40 in March, from a reading of 42.40 reported in February. However, providing some relief, Germany’s economic sentiment index rose to a level of 48.50 in March, its highest level since April 2010 and compared to a level of 48.20 reported in January, while the current situation index rose sharply to a level of 13.6 in March, compared to a level of 5.20 reported in the previous month.
The greenback remained supported, after housing starts in the US rose 0.8% (MoM) to a seasonally adjusted annual rate of 917,000 units in February, while building permits rose 4.6% (MoM) to a 946,000 annual rate in February, following a downwardly revised 904,000 in January.
In the Asian session, at GMT0400, the pair is trading at 1.2872, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.2821, and a fall through could take it to the next support level of 1.2769. The pair is expected to find its first resistance at 1.2947, and a rise through could take it to the next resistance level of 1.3021.
Germany’s producer price index, scheduled for release later today, is forecast to rise slower than that in the previous month, while the Euro-zone’s consumer confidence is expected to report a slight rise in March.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
