EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.31% against the USD and closed at 1.3472, after the European Central Bank (ECB) President, Mario Draghi cooled off speculations for a negative deposit interest rate in the Euro-zone economy, by stating that since a rate cut in the last meeting, “there are no news.” Positive sentiment was also fuelled after the ECB Governing Council member and Chief of Bundesbank, Jens Weidmann, highlighted the need for the ECB to exit its low interest rate environment at the right time.
On the economic front, Markit Economics reported that its manufacturing PMI for the Euro-zone edged up to a reading of 51.5 in November, in line with market estimates and compared to a level of 51.3 registered in the previous month. However, Markit PMI for the Euro-zone’s service sector declined to a level of 50.9 in November, defying analysts’ expectation for a rise to 51.9 from previous month’s reading of 51.6. Separately, the European Commission revealed that consumer confidence in the Euro-zone economy unexpectedly fell to a reading of -15.4 in November, from a figure of -14.5 seen in the earlier month.
Meanwhile, in the US, St. Louis Fed President, James Bullard suggested that the Fed should continue with its accommodative bond buying for some more time to achieve its inflation target, which according to him, was showing “no signs” of improvement. On the contrary, the Richmond Fed President, Jeffrey Lacker stated that “the US inflation rate is likely to move closer to 2% over the next year or two” although some policymakers have expressed concerns over cool rates of inflation.
In the Asian session, at GMT0400, the pair is trading at 1.3464, with the EUR trading 0.06% lower from yesterday’s close.
The pair is expected to find support at 1.3412, and a fall through could take it to the next support level of 1.3361. The pair is expected to find its first resistance at 1.3501, and a rise through could take it to the next resistance level of 1.3539.
Later today, the Statistisches Bundesamt Deutschland is scheduled to release a report on Germany’s gross domestic product (GDP) data.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
