EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.35% against the USD and closed at 1.3588, after the ECB Executive Board member, Benoit Coeure, hinted that the central bank was “very seriously” considering a negative deposit rate in the region. The currency also came under pressure due to yesterday’s dismal Euro-zone industrial output which declined more-than-expected 0.7% (MoM) in December, following a revised 1.6% rise witnessed in the preceding month.
ECB Governing Council member, Ardo Hansson refuted any signs of deflation risks in the Euro-zone before adding that if any such risks surface in the future the central bank should consider quantitative easing measure in the region.
However, the Euro managed to claw back some of its losses after ECB’s Christian Noyer opined that the central bank’s monetary policy can not devalue the Euro and after another ECB member, Luc Coene, indicated that the recent drop in the region’s inflation rate “is not sufficient” to force ECB’s hand on whether to take further action to support the euro zone’s weak economy.
Meanwhile, across the Atlantic, St. Louis Fed President, James Bullard, cited the latest batch of uninspiring US economic data as not enough to discourage the Fed from further tapering of its stimulus package. He further stated that the US economy would return to normalcy and projected economic growth to accelerate to 3% in 2014.
In the Asian session, at GMT0400, the pair is trading at 1.3613, with the EUR trading 0.18% higher from yesterday’s close.
The pair is expected to find support at 1.3565, and a fall through could take it to the next support level of 1.3517. The pair is expected to find its first resistance at 1.3657, and a rise through could take it to the next resistance level of 1.3701.
Traders keenly await Germany’s consumer inflation data and the ECB’s monthly report, which would provide an insight into the prevailing economic situation of the Euro-zone.
The currency pair is trading between its 20 Hr and 50 Hr moving averages.
