EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.58% against the USD and closed at 1.2939, as immediate fears about a financial meltdown in Cyprus eased following news that Cypriot government would come up with a new plan to raise funds needed for the country to secure a crucial international bailout. Moreover, Cyprus’s Finance Minister Michalis Sarris stated that talks with Russian official on alternative means of financial support were “very constructive,” which helped calm foreign-exchange markets.
In economic news, current account surplus in the Euro-zone narrowed to €14.8 billion in January, while Germany’s producer prices declined unexpectedly in February. However, the consumer confidence index in the Euro-zone improved slightly to a reading of -23.5 in March.
Meanwhile, in the US, the Federal Open Market Committee decided to leave its benchmark interest rate unchanged in the range of 0.0% to 0.25% and has maintained the size of asset purchases at $85.0 billion per month. Moreover, the Federal Reserve modestly lowered its gross domestic product (GDP) growth forecast for 2013 to between 2.3% and 2.8% from the previously estimated range of 2.3% to 3.0%.
Also, in his post-meeting press conference, the Chairman of the US Fed, Ben Bernanke, indicated that though the labour market in the US is gaining momentum, the central bank would continue with its ultra loose policy stance until they are fully assured that gains are sustainable.
In the Asian session, at GMT0400, the pair is trading at 1.2945, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.2882, and a fall through could take it to the next support level of 1.2820. The pair is expected to find its first resistance at 1.2993, and a rise through could take it to the next resistance level of 1.3042.
In Europe, services and manufacturing PMI are scheduled for release in France, Germany and the Euro-zone, wherein investors are hopeful of encouraging PMI numbers in March.
The currency pair is showing convergence with its 20 Hr moving average and is trading above its 50 Hr moving average.
