EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.09% against the USD and closed at 1.3674. The US Dollar gained ground against the Euro amid speculation that the Fed, in its two-day policy meeting, would taper its stimulus package by another $10 billion this month. The greenback also received some support from Markit service PMI data, which revealed that activities in the US service sector rose more-than-expected to a reading of 56.6 in January, from previous month’s level of 55.7.
Meanwhile, in the Euro-zone, the European Central Bank (ECB) governing council member and the President of Bundesbank, Jens Weidmann, played down risks to price stability in the Euro-zone economy and backed ECB President, Mario Draghi’s view that the economic recovery in the region was gradual but yet weak. Additionally, he suggested the Euro-zone citizens to trust the ECB for upholding its mandate and that the central bank would react to raise interest rates when necessary.
On the economic front, the CESifo Group reported that its index on Germany’s business climate rose to a reading of 110.6 in January, more than analysts’ call for a rise to 110.0 and compared to previous month’s reading of 109.5. The group also reported that the IFO business expectations from the German economy advanced more than market expectations to a level of 108.9 in January, from a figure of 107.4 registered in the preceding month. Meanwhile, the IFO – current assessment of Germany rose to a figure of 112.4, from previous month’s level of 111.6.
In the Asian session, at GMT0400, the pair is trading at 1.3677, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.3647, and a fall through could take it to the next support level of 1.3617. The pair is expected to find its first resistance at 1.3712, and a rise through could take it to the next resistance level of 1.3747.
Traders are expected to keep a close watch on Germany’s import price index and consumer confidence data from France and Italy, slated for release later today.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
