EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 0.77% against the USD and closed at 1.1474.
Macroeconomic data released showed that industrial production in the Euro-zone rose less-than-expected by 0.9% YoY in August, from an upwardly revised 1.7% rise in July. Investors had expected it to increase by 1.8%. On the other hand, on a MoM basis, industrial production fell 0.5%in August, at par with market expectations, from an upwardly revised 0.8% rise in the previous month.
Elsewhere, the final consumer price index (CPI) in France, Euro-zone’s second largest economy, remained stable at 0.1% YoY in September, in line with expectations. Meanwhile, Italy’s final consumer price inflation fell more-than-expected by 0.4% MoM in September. On an annual basis, the index rose 0.2%, compared to its preliminary figure of 0.3%.
The greenback lost ground, after the US retail sales barely rose in September and producer prices recorded their biggest drop in eight months, thus raising further doubts about whether the Federal Reserve will raise interest rates this year.
Data showed that US retail sales edged up 0.1% MoM in September, missing the forecasted rise of 0.2%, and after being flat in August. At the same time, producer price index (PPI) in the US fell 0.5% MoM in the same month, after staying flat in August, while markets expected it to slip by 0.2%The more-than-expected decline in producer prices was largely attributed to a steep fall in energy prices.
Further, the US MBA mortgage applications plunged 27.6% in the week ended 09 October, following a jump of 25.5% in the preceding week,
Separately, the US Federal Reserve stated in its Beige Book report that overall economic activity continued to expand modestly from mid-August through early October, with nine of the 12 Fed districts reporting moderate growth, compared with 11 in the previous report. The report further indicated that the US dollar’s appreciation restrained manufacturing activity and tourism spending at many of the districts. Also, economic slowdown in China, the world’s second-largest economy, continued to weigh on businesses during the same period.
In the Asian session, at GMT0300, the pair is trading at 1.1489, with the EUR trading 0.14% higher from yesterday’s close.
The pair is expected to find support at 1.1418, and a fall through could take it to the next support level of 1.1347. The pair is expected to find its first resistance at 1.1526, and a rise through could take it to the next resistance level of 1.1562.
Moving ahead, investors will pay close attention to the US consumer price index and the Philadelphia Fed manufacturing survey data, both for the month of September, scheduled to be released later today.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
