EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 0.08% against the USD and closed at 1.0971, after the Euro-zone’s annual inflation advanced to its highest level in more than two years in October.
The preliminary consumer price index (CPI) rose by 0.5% on an annual basis in October, meeting market expectations, but falling well short of the European Central Bank’s (ECB) target, suggesting that the central bank will extend its asset-purchase programme in December in a bid to achieve its inflation goal. The CPI recorded a gain of 0.4% in the prior month. Additionally, the region’s seasonally adjusted flash GDP data indicated that the region’s economic growth remained steady at 0.3% in the three months through September, in line with market expectations, indicating that measures taken by the ECB to combat an expected economic slowdown following Britain’s decision to leave the European Union are somewhat working.
Elsewhere, in Germany, retail sales unexpectedly dropped to a two-year low level of 1.4% MoM in September, defying market expectations for an advance of 0.2% and after recording a revised drop of 0.3% in the prior month.
Macroeconomic data released in the US indicated that personal spending climbed more-than-expected by 0.5% MoM in September, pointing towards strong momentum in household spending. Markets expected it to advance by 0.4%, compared to a revised drop of 0.1% in the previous month. Meanwhile, the nation’s personal income increased by 0.3% on a monthly basis in September, falling short of market expectations for a gain of 0.4% and compared to an advance of 0.2% in the prior month.
In other economic news, the nation’s the Dallas Fed manufacturing business index improved to a level of -1.5 in October, compared to a reading of -3.7 in the prior month. On the other hand, the Chicago Fed purchasing managers index dropped to a level of 50.6 in October. In the previous month, the index had recorded a level of 54.2.
In the Asian session, at GMT0400, the pair is trading at 1.0959, with the EUR trading 0.11% lower against the USD from yesterday’s close.
The pair is expected to find support at 1.0933, and a fall through could take it to the next support level of 1.0906. The pair is expected to find its first resistance at 1.0987, and a rise through could take it to the next resistance level of 1.1014.
Amid a lack of major economic releases in the Euro-zone today, market participants would look forward to the US ISM manufacturing PMI and final Markit manufacturing PMI, both for October along with construction spending for September, all due to release later in the day.
The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
