EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose marginally against the USD and closed at 1.3574, as risk sentiment got a lift, amid improving political situation in Germany and Italy. In Germany, Angela Merkel and the centre-left Social Democratic Party struck a deal to form a coalition government. Meanwhile, in Italy, Prime Minister, Enrico Letta, won a confidence vote on the 2014 budget, despite Silvio Berlusconi withdrawing support to the government.
On the economic front, the GfK consumer confidence in Germany rose to a reading of 7.4 in December, defying analysts’ call for the consumer confidence to remain unchanged at previous month’s level of 7.1.
Meanwhile, in the Euro-zone, the European Central Bank (ECB), in its semi-annual financial stability review, stated that, “indicators measuring systemic stress have fallen back to close to their pre-crisis levels.” However, the central bank also cautioned that, “global recovery remains muted and uneven across countries and region” with “risks clearly tilted to the downside.” Elsewhere, the Italian Senate voted in favour to expel the former Prime Minister, Silvio Berlusconi from the Parliament, with immediate effect, as a result of his conviction for tax fraud.
The US Dollar declined, after the US Census Bureau reported that durable goods orders in the nation declined 2.0% in October, more than market expectation for a 1.9% fall and compared to a 3.8% increase witnessed in the preceding month. However, the losses in the greenback were capped, after the US Department of Labour revealed that the US initial jobless claims unexpectedly declined to 316,000 for the week ended November 22, from previous week’s reading of 326,000. Separately, Reuters/University of Michigan also reported that its index on the US consumer sentiment rose more-than-expected to a reading of 75.1 in November, compared to a figure of 73.2 registered in October.
In the Asian session, at GMT0400, the pair is trading at 1.3581, with the EUR trading slightly higher from yesterday’s close.
The pair is expected to find support at 1.3555, and a fall through could take it to the next support level of 1.3528. The pair is expected to find its first resistance at 1.3611, and a rise through could take it to the next resistance level of 1.3640.
Later today, the European Commission is expected to release a report on Euro-zone’s consumer and economic confidence level, following Germany’s employment data.
The currency pair is showing convergence with its 20 Hr moving average and is trading just above its 50 Hr moving average.
