EURUSD Movement
On Friday, EUR declined 0.47% against the USD and closed at 1.2831. The greenback registered gains as better-than-expected employment data in the US raised speculations that the improving US economy could prompt the Federal Reserve to lower its monetary stimulus. The employment prospect in the US looked very encouraging after nonfarm payroll employment increased by 195K jobs in June, while the unemployment rate remained unchanged at 7.6% in June.
Separately, the Euro-zone had no news to cheer as French trade deficit widened in May, while Spanish industrial output registered a drop in May. Adding to concerns, factory orders in Germany unexpectedly slipped 1.3% in May, against an expected 1.2% rise.
Separately, the European Central Bank (ECB) Executive Board member, Benoit Coeure, stated that the Euro-zone economy “should stabilise and recover in the course of the year, albeit at a subdued pace.” Risks to the outlook are tilted to the downside, including from the recent tightening of global markets.
On the ratings front, Standard & Poor’s revised Portugal’s sovereign credit outlook downward to ‘Negative’ from ‘Stable’, citing concerns that political instability might derail the country’s fragile economy. On the other hand, Fitch Ratings upgraded Cyprus’s long-term local currency issuer default rating to ‘triple-C’, and kept the outlook negative.
Meanwhile, over the weekend, the EU and Greek officials stated that Greece is likely to reach a deal with its international creditors on its latest bailout review on Monday to unlock further aid worth €8.1 billion.
In the Asian session, at GMT0300, the pair is trading at 1.2821, with the EUR trading marginally lower from Friday’s close.
The pair is expected to find support at 1.2783, and a fall through could take it to the next support level of 1.2746. The pair is expected to find its first resistance at 1.2881, and a rise through could take it to the next resistance level of 1.2942.
In the key event today, ECB President, Mario Draghi is set to testify before the committee on Economic and Monetary Affairs in the European Parliament in Brussels. Additionally, on economic landscape, Germany is slated to release its trade balance, current account and industrial production data, later today.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
