EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.50% against the USD and closed at 1.3591, as the European Central Bank (ECB) President, Mario Draghi expressed optimism on the recovery of the Euro-zone economy and after news that Italian Prime Minister, Enrico Letta won a confidence vote in the parliament, avoiding the need for another election.
The ECB left its benchmark interest rate unchanged at a record low of 0.5% or a fifth month. Following the central bank’s interest rate decision, the central bank President, Mario Draghi, affirmed a ‘gradual economic improvement’ in the region’s economy and stated that the ‘inflation expectations are anchored firmly’. He also added that the central bank is ready to take any necessary measures to keep money-market rates in check.
Meanwhile, in Italy, Italian Premier, Enrico Letta, won a decisive victory in a confidence vote after the Senate voted 235 to 70 in favour of the government, while former Prime Minister, Silvio Berlusconi, backed down from his earlier plan of withdrawing his party’s support from the government coalition.
Moreover the USD also came under pressure, after a Boston Fed Chief, Eric Rosengren indicated that slow growth and a weak jobs market suggest that the US economy will continue to need support from accommodative monetary policy for years to come, making reductions in stimulus inappropriate at this point. Negative sentiment for the US Dollar was also fuelled after US jobs figures reported by the ADP came in weaker than expected, reflecting another downturn in hiring for September.
In the Asian session, at GMT0300, the pair is trading at 1.3609, with the EUR trading 0.13% higher from yesterday’s close.
The pair is expected to find support at 1.3535, and a fall through could take it to the next support level of 1.3460. The pair is expected to find its first resistance at 1.3654, and a rise through could take it to the next resistance level of 1.3698.
Investors are expected to keep a close watch on Euro-zone’s Markit service PMI and retail sales data, scheduled to release later during the day, for further guidance in the movement of the Euro.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
