EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.34% against the USD and closed at 1.3742, as investors’ appetite for risk taking declined after the Bank of Italy Director General, Luigi Signorini, indicated that Italy’s economic growth would be worse than government forecast this year and the following year. Traders also recollected previous week’s European Central Bank (ECB) Executive Board member, Joerg Asmussen’s statement that Italy would “critically determine the fate of the euro-area” and after Fitch Ratings affirmed Italy’s BBB+ rating with a negative outlook in the last week.
However losses in the Euro were capped after the European Central Bank (ECB) Governing Council Member, Ewald Nowotny, hinted that he saw no effective tool that the central bank could use to ease the currency’s bullish pressure. He additionally abated concerns over a possible interest rate cut, by stating that the ECB is focusing on liquidity besides interest rates to tackle the strong Euro.
Meanwhile, in the US, an official report revealed that retail sales in the nation declined 0.1% (MoM) in September, defying market expectations for a 0.1% rise and compared to a 0.2% increase recorded in the previous month. Another report showed that consumer confidence in the US declined to a level of 71.2 in October, more than analysts’ estimate for a fall to 75.0 from a reading of 80.2 registered in the preceding month.
In the Asian session, at GMT0400, the pair is trading at 1.3737, with the EUR trading slightly lower from yesterday’s close.
The pair is expected to find support at 1.3709, and a fall through could take it to the next support level of 1.3680. The pair is expected to find its first resistance at 1.3790, and a rise through could take it to the next resistance level of 1.3842.
Market participants are expected to take cues from Euro-zone’s consumer confidence report and Germany’s unemployment data, scheduled to release later today.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
