EURUSD Movement
For the 24 hours to 23:00 GMT, EUR edged up marginally against the USD and closed at 1.3334, on comments from the German central bank which suggested that the European Central Bank’s (ECB) low interest rate pledge last month was “not an unconditional commitment”, raising expectations that the ECB’s next move on rates would depend on the medium-term outlook for inflation. Meanwhile, lingering uncertainty over Fed’s stimulus programme and lack of economic releases in the US, additionally weighed on the demand of the dollar.
In its monthly report, the Bundesbank indicated that the Euro-bloc’s economy would benefit from record low interest rates set by the ECB. The report further added that the commitment to keep interest rates low to spur recovery doesn’t mean the monetary authority won’t take action to curb rising inflation rates.
Also, the Bundesbank forecast yesterday that the Europe’s biggest economy, Germany, would return to “normal, steady growth” in the second half of 2013, but sounded cautious over revival in investment.
In the Asian session, at GMT0300, the pair is trading at 1.3350, with the EUR trading 0.12% higher from yesterday’s close.
The pair is expected to find support at 1.3318, and a fall through could take it to the next support level of 1.3285. The pair is expected to find its first resistance at 1.3379, and a rise through could take it to the next resistance level of 1.3407.
Investors are expected to keep a close watch over the release of Germany’s producer inflation data and Eurostat’s report on Euro-zone’s construction output during June, slated later today.
The currency pair is trading just above its 20 Hr and 50 Hr moving averages.
