EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 1.09% against the USD and closed at 1.3035, as investor sentiment dented after European Central Bank’s (ECB) Governing Council member and Bundesbank Chief, Jens Weidmann, stated that the ECB could reduce interest rates further if economic data warranted. However, he also added that monetary policy is already quite expansionary. He also warned that overcoming the debt crisis and the crisis effects would remain a challenge over the next decade
The International Monetary Fund urged central banks around the world to keep an eye on monetary stimulus programs in place to better prevent asset bubbles from swelling in local markets, warning that the policies could inflate asset bubbles and destabilize financial markets. On the economic front, Euro-zone’s construction production staged a 0.8% rebound in February.
Meanwhile, in the US, the latest Federal Reserve (Fed) Beige Book survey indicated that the overall US economy expanded at a moderate pace in late February through early April.
Separately, the Federal Reserve Bank (Fed) of St. Louis President, James Bullard stated that, price stability should remain the focus even in the face of serious labor market inefficiencies. He added that monetary policy should be guided by the Fed’s inflation goal and resist putting more weight on its employment mandate.
In the Asian session, at GMT0300, the pair is trading at 1.3055, with the EUR trading 0.15% higher from yesterday’s close.
The pair is expected to find support at 1.2970, and a fall through could take it to the next support level of 1.2886. The pair is expected to find its first resistance at 1.3170, and a rise through could take it to the next resistance level of 1.3286.
In the absence of major economic events in the Euro-zone, the initial jobless claims, CB leading indicator and Philadelphia Fed manufacturing survey data due in the US later today shall determine the trend in the pair.
The currency pair is trading just below its 20 Hr and 50 Hr moving averages.
