EURUSD Movement
On Friday, EUR declined 0.17% against the USD and closed at 1.3726, after the European Central Bank (ECB) policymaker, Peter Praet, stated that the region’s economic recovery remains fragile.
On the economic front, the number of people with jobs in the Euro-zone was unchanged for the second consecutive quarter in the three months of September, thereby indicating that the region has not yet witnessed an impressive improvement in the labour market. Meanwhile, the monthly wholesale price index (WPI) in Germany dropped 0.2% in November, compared to a 1.0% decline recorded in October. However, the consumer inflation prices in Spain unexpectedly climbed 0.2% in November, on an annual basis, following a 0.1% decline recorded in October.
Furthermore, the greenback remained supported by the release of mostly upbeat US data during the last week, leading to a build-up of positive sentiment for the US economic recovery and increasing bets for a Fed tapering. On the macro front, the producer price inflation in November surprisingly fell by 0.1% (MoM), defying market expectations of a flat change, and declining 0.2% in the previous month.
In the Asian session, at GMT0400, the pair is trading at 1.3755, with the EUR trading 0.21% higher from Friday’s close.
The pair is expected to find support at 1.3719, and a fall through could take it to the next support level of 1.3682. The pair is expected to find its first resistance at 1.3781, and a rise through could take it to the next resistance level of 1.3806.
Investors this week would focus on the Federal Reserve’s monetary policy meeting, which would determine the near term dynamics in the US Dollar. Additionally, a host of important domestic economic releases from the Euro-zone is scheduled this week, which would give a fair idea about the sustainability of the region’s economic recovery.
The currency pair is trading above its 20 Hr moving average and is showing convergence with its 50 Hr moving average.
