EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.29% against the USD and closed at 1.2505, as investors remained doubtful that a European leader’s summit later this week would produce any substantive measures to soothe region’s escalating debt crisis.
Meanwhile, Spain formally requested Euro-zone rescue loans for up to €100 billion ($125 billion) to recapitalize its debt-laden banks, stating that the final amount of financial assistance would be set at a later stage.
Late yesterday, Moody’s Investors Service downgraded the long-term debt and deposit ratings for 28 Spanish banks and two issuer ratings by one to four notches.
Adding to bearish sentiments, Cyprus became the fifth Euro-zone country, to formally request a bailout from the Euro-zone, as it struggles to shore up banks that took heavy losses on Greek debt.
In a bond auction, Germany raised over €2 billion by selling 12-month bills, at yields of 0.0191%. Separately, France sold €8.385 billion of short-term bills, ranging from maturities of three months to one year, at the top end of its target range of €7.1 billion to €8.4 billion.
On the economic front, Germany’s government debt increased 2.1% on an annual basis to €2,042 billion in the first quarter of 2012. Additionally, Spain’s annual producer price inflation rose to 3.2% in May, from 3.0% in April.In the Asian session, at GMT0300, the pair is trading at 1.2517, with the EUR trading 0.10% higher from yesterday’s close.
The pair is expected to find support at 1.2477, and a fall through could take it to the next support level of 1.2437. The pair is expected to find its first resistance at 1.2551, and a rise through could take it to the next resistance level of 1.2585.
Trading trends in the pair today are expected to be determined by the release of German GfK consumer confidence survey, French consumer confidence indicator and Italian retail sales data.
The currency pair is trading between its 20 Hr and 50 Hr moving averages.
