EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.65% against the USD and closed at 1.2777, as the S&P ratings agency lowered Italy’s sovereign credit rating to ‘BBB’from‘BBB-plus’, with a ‘Negative’ outlook. Furthermore, Joerg Asmussen, a member of the European Central Bank’s Governing Council, reportedly stated that the central bank would maintain low interest rates for an “extended period” extended beyond 12 months.
Moreover, the International Monetary Fund lowered its forecasts for global economic growth for 2013 to 3.1%, from 3.3% in April and cut its 2014 growth forecast to 3.8% from 4.0% and also indicated that the recession in the Euro-zone would deepen.
In other developments, the European Union finance ministers approved Latvia’s application to become the 18th country to use the euro. The euro notes and coins would be issued in Latvia on 1 January, 2014.
In economic news, budget deficit in France widened to €72.6 billion in May, from a €66.8 billion deficit recorded in April.
In the Asian session, at GMT0300, the pair is trading at 1.2779, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.2722, and a fall through could take it to the next support level of 1.2666. The pair is expected to find its first resistance at 1.2867, and a rise through could take it to the next resistance level of 1.2956.
Trading trends in the pair today are expected to be determined by the release of German consumer price index and the French current account and industrial output. Meanwhile, investors await the release the minutes from its June Federal Open Market Committee (FOMC) policy meeting in the US, followed by a speech by Fed Chairman Ben Bernanke, to get insights on the Federal Reserve’s stimulus tapering plans.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
