EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined marginally against the USD and closed at 1.3109. Yesterday, the European Central Bank Executive board member, Joerg Asmussen, stated that the monetary policy will remain expansionary for as long as needed.
In Europe, the economic data showed that current account surplus in the Euro-zone narrowed to €19.6 billion in May, from a revised surplus of €23.8 billion recorded in April.
In a key development, the Greek government pushed delayed reforms through Parliament, approving a new batch of austerity measures to unlock next €6.8 billion tranche of EU-IMF loans.
Meanwhile, investors ignored political turmoil in Spain and a credit downgrade in France, to queue up at bond auctions. The Spanish Treasury sold €3.1 billion ($4.1 billion) at a triple bond sale, topping the target range of €2 billion to 3 billion and with average yields lower on all three issues. In France, Agence France Tresor sold €9.23 billion of fixed rate, medium-term bonds as well as three lines of inflation-linked bonds, with investors putting in bids for two to three times the amount on offer.
The greenback rose, after data indicated that the number of people who filed for unemployment claims in the US fell to a two-month low last week. Additionally, the Philadelphia Fed manufacturing index unexpectedly rose to a two-year high in July.
Additionally, the Moody’s Investors Service upgraded the US credit rating to “Stable” from “Negative”.
Also, the Federal Reserve Chairman, Ben Bernanke, speaking before the Senate Banking Committee, reiterated his comments made on Wednesday to the House Financial Services Committee. He stated that it was too early to make conclusion on whether the Fed will slow down asset purchases at its September meeting.
In the Asian session, at GMT0300, the pair is trading at 1.3137, with the EUR trading 0.21% higher from yesterday’s close.
The pair is expected to find support at 1.3085, and a fall through could take it to the next support level of 1.3033. 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 1.3203.
Data slated today includes producer price index in Germany and industrial orders data from Italy.
The currency pair is trading above its 20 Hr and its 50 Hr moving averages.
