EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.39% against the USD and closed at 1.3369, as the service sector expanded at a rate lesser-than-initially estimated to 54.2 in July compared to a market estimate of 54.4. Elsewhere, the Markit composite PMI for the region rose to a three month high reading of 53.8 in July compared to 52.8 in June, a bit lower than the market estimate of 54.0. Germany, Eurozone’s biggest economy, indicated that services activity grew at the fastest rate compared to previous three years as the nation’s services PMI recorded a rise to 56.7 in July. Meanwhile, service sector in Spain and France also expanded, while Italy’s services PMI figure came in disappointing.
However, Euro-zone’s fastest annual retail sales rate since 2007 provided some optimism. The seasonally adjusted retail sales registered a rise of 2.4%, on an annual basis, higher than market expectations for a rise of 1.4% after it climbed 0.6% in the past month.
The USD received a boost as the nation’s ISM non-manufacturing index jumped to an eight-year high reading of 58.7 in July, from 56.0 in June. Additionally, the new factory orders rose more than expected in June. It registered a 1.1% increase after a downwardly revised 0.6% decline in May. The market had expected it to rise 0.6%However, the Markit services PMI dipped to reading of 60.8 in July, down from June’s reading of 61.0. Meanwhile, The IBD/TIPP economic optimism index for the US dropped unexpectedly to 44.5 in August, lower than market expectations of 47.3. The index had registered a level of 45.6 in the previous month.
Yesterday, Dallas Fed President Richard Fisher hinted that if economic data from the US continue to paint a rosy picture of the economy, then the central bank would be forced to hike its key interest rate earlier than expected.
In the Asian session, at GMT0300, the pair is trading at 1.3369, with the EUR trading flat from yesterday’s close.
The pair is expected to find support at 1.3342, and a fall through could take it to the next support level of 1.3315. The pair is expected to find its first resistance at 1.3411, and a rise through could take it to the next resistance level of 1.3453.
Trading trends in the Euro today are expected to be determined by German factory orders for June, to be out in a few hours.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
