EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.41% against the USD and closed at 1.3808.
The US Dollar lost momentum, on the back of disappointing pending US home sales data. According to the National Association of Realtors, monthly pending home sales in the US rose 0.2% in November, lesser than market expectations of a 1.0% rise and following a revised drop of 1.2% recorded in the previous month. On the contrary, the Dallas manufacturing business index reported by the Federal Reserve Bank of Dallas rose to a level of 3.1 in December, higher than the market expectations of a reading of 2.0 and compared to a level of 1.9 reported in the preceding month.
On the macro front in the Euro-zone, retail sales in Spain climbed 1.9% on a seasonally adjusted annual basis in November, compared to a 0.5% fall reported in the earlier month. Additionally, the business confidence index in Italy increased to a reading of 98.2 in December, lesser than market expectation of a level of 99.0 and compared to a revised reading of 98.0 reported in the earlier month. Moreover, the producer price index (PPI) in Italy declined 0.1% in November, following a revised drop of 1.0% reported in the earlier month. Separately, the Italian Treasury Department sold its long term bond at higher yields, highlighting a lack of confidence in the Italian economy.
Meanwhile, the German Finance Minister, Wolfgang Schaeuble noted that the low interest rate policies adopted by central banks around the world could not continue forever, as it is posing a problem for long-term investments. He further added that the European Union (EU) would not abandon Greece; instead the nation would receive all the support it needs from the EU. However, the Prime Minister of Greece, Antonis Samaras stated that Greece would no longer require another bailout programme and it would be exiting the EU-IMF bailout programme in 2014. He further added that the nation would venture out in the open market again in a bid to regain normalcy.
In the Asian session, at GMT0400, the pair is trading at 1.3796, with the EUR trading 0.09% lower from yesterday’s close.
The pair is expected to find support at 1.3742, and a fall through could take it to the next support level of 1.3688. The pair is expected to find its first resistance at 1.3835, and a rise through could take it to the next resistance level of 1.3874.
With a void of economic releases today and tomorrow, investors would likely shift their focus to a slew of manufacturing PMI reports across the Euro-zone to be released on Thursday.
The currency pair is showing convergence with its 20 Hr moving average and is trading above its 50 Hr moving average.
