EURUSD Movement
For the 24 hours to 23:00 GMT, EUR marginally declined against the USD and closed at 1.3666.
The US Dollar was supported by robust US retail sales which grew more than expected, offsetting the concern raised last week about the health of the economy, following tepid jobs report. On a monthly basis, retail sales in the US increased a seasonally adjusted 0.2% in December, following a downwardly revised 0.4% gain recorded in the previous month. Market had expected retail sales to increase 0.1% in December. A separate report revealed the import price index remained flat in December, after a decline of 0.9% in the previous month. Additionally, the business inventories in the US rose 0.4% in November after reporting a revised rise of 0.8% in the previous month. Market had expected business inventories to rise 0.3% in November.
Furthermore, the Dallas Fed President, Richard Fisher opined that though he was glad that the central bank had finally gone ahead with its tapering plans, however he felt that it should have doubled the size of its tapering.
Meanwhile, the Philadelphia Fed President, Charles Plosser stated that last week’s weak jobs report should not be an obstacle in the Fed’s plans of gradually cutting the pace of its bond-buying stimulus program as the economy is on “firmer footing”.
Early yesterday, the Euro received some support after Eurostat reported the industrial production in the Euro-zone increased 1.8% in November, following a revised fall of 0.8% recorded in the preceding month and beating analysts’ projections for a 1.4% advance. Further supporting the common currency were comments by European Central Bank (ECB) Governing Council Member, Ewald Nowotny, who stated that the growth in the region, including its biggest economy, Germany, may surpass expectations this year, contrary to concerns expressed by the ECB chief, Mario Draghi last week.
In the Asian session, at GMT0400, the pair is trading at 1.3633, with the EUR trading 0.24% lower from yesterday’s close.
The pair is expected to find support at 1.3606, and a fall through could take it to the next support level of 1.3579. The pair is expected to find its first resistance at 1.3680, and a rise through could take it to the next resistance level of 1.3727.
Trading trends in the pair today are expected to be determined by the trade balance data from the Euro-zone, along with mortgage application data from the US and the Fed’s Beige Book report which would provide insights into the current US economic situation.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
