EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.61% against the USD and closed at 1.3119, as dovish comments from the European Central Bank (ECB) President, Mario Draghi, on the region’s benchmark interest rate spooked investors confidence.
The ECB President, Mario Draghi, said that he would consider a further reduction if money-market rates climbed too high, after revealing that the ECB has maintained its benchmark interest rate unchanged at 0.5%, meeting market expectations.
Moreover, the head of the ECB ruled out handing Greece a debt relief lifeline and stated that the European Central Bank would not participate in any country’s debt restructuring plan, despite growing speculation that Greece will be unable to fully return to the financial markets when its current bailout ends in 2014.
On the economic front, demand for German manufactured goods dipped more than market had estimated in July, sinking 2.7% from upwardly revised 5.0% rise registered in June and in comparison with a 1.0% decrease expected.
Elsewhere in the US, official data revealed that initial jobless claim in the nation rose to a level of 323,000 during the week ended 30 August 2013, less than analysts’ expectation for an increase to 330,000 and compared to a reading of 332,000 registered in the previous week. Meanwhile, the ISM non-manufacturing PMI advanced to a reading of 58.6 in August, surpassing market consensus for a rise to 55.0 and following a reading of 56.0 registered in the previous month. Another government data showed that the US factor orders declined 2.4% (MoM) during July, less than analysts’ prediction for a 3.3% fall and compared to 1.6% rise seen in the previous month.
In the Asian session, at GMT0300, the pair is trading at 1.3136, with the EUR trading 0.13% higher from yesterday’s close.
The pair is expected to find support at 1.3089, and a fall through could take it to the next support level of 1.3041. The pair is expected to find its first resistance at 1.3204, and a rise through could take it to the next resistance level of 1.3271.
Investors are expected to keep a close watch on Germany’s industrial production and trade balance data for further guidance.
The currency pair is showing convergence with its 20 Hr moving average and is trading below its 50 Hr moving average.
