EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.60% against the USD and closed at 1.2926, as an unexpected rise in the US initial jobless claims data for the week ended 30th March 2013 pressured the greenback.
However, the Euro had earlier come under pressure after the European Central Bank President, Mario Draghi, stated that interest rate cuts were possible in the near future after leaving benchmark interest rate unchanged at a record low of 0.75%, in line with the market expectations. He also added that the ECB, in the coming weeks, would closely watch incoming economic data and assess the risks to the bank’s target for annual inflation of near but just below 2.0%.
In economic news, German services purchasing managers’ index (PMI) declined to a level of 50.9 in March, while Euro-zone’s services PMI fell to a level of 46.4 in March. Separately, producer price index (PPI) in the Euro-zone rose 0.2% in February, in line with market expectations.
Meanwhile, in the US, Esther George, the President of the Federal Reserve Bank (Fed) of Kansas City, warned that the central bank’s ultra loose monetary policy is overly accommodative and could pose a risk to financial stability and long-term inflation expectations.
In the Asian session, at GMT0300, the pair is trading at 1.2928, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.2799, and a fall through could take it to the next support level of 1.2669. The pair is expected to find its first resistance at 1.3004, and a rise through could take it to the next resistance level of 1.3079.
In the Euro-zone, the retail sales and the GDP data are likely give direction to the currency pair movement, while Germany’s factory orders is also expected to impact the pair. Moreover, the unemployment rate in the US, another key economic indicator would remain in focus.
The currency pair is trading way above its 20 Hr and 50 Hr moving averages.
