EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 0.86% against the USD and closed at 1.1628, after the European Central Bank (ECB) President, Mario Draghi, hinted that tapering of its ultra-loose monetary policy is on the table this autumn and painted a positive outlook of the common currency region.
The ECB, at its latest monetary policy meeting, unanimously voted to hold interest rates at 0.00% and pledged to continue the asset purchase plan through December or beyond, if financial conditions become inconsistent in future. In a post-meeting statement, the ECB Chief, Mario Draghi, stated that governing council agreed in setting no precise date for a discussion about potential changes to the central bank’s quantitative easing programme, but noted that it would occur in the autumn. Draghi further added that underlying inflation is likely to rise in the coming months, albeit gradually.
In other economic news, the Euro-zone’s flash consumer confidence index unexpectedly fell to a level of -1.7 in July, while market participants expected it to advance to a level of -1.2. The index had registered a reading of -1.3 in the previous month. Meanwhile, the region’s seasonally adjusted current account surplus widened to a level of €30.1 billion in May, following a revised current account surplus of €23.5 billion in the prior month.
Separately, in Germany, the producer price index remained flat on a monthly basis in June, after recording a drop of 0.2% in the prior month.
The greenback traded mixed against a basket of major currencies, amid reports that Special Counsel, Robert Mueller, who is investigating possible ties between the Trump campaign and Russia, was looking into business transactions involving the US President, Donald Trump.
On the macro front, initial jobless claims in the US dropped to a nearly five-month low level of 233.0K in the week ended 15 July, boosting optimism over the health of the nation’s labour market. In the prior week, initial jobless claims had registered a revised reading of 248.0K, while and markets anticipated for a fall to a level of 245.0K. Further, the nation’s leading indicators advanced more-than-expected by 0.6% in June, following a gain of 0.3% in the prior month.
On the contrary, the nation’s Philadelphia Fed manufacturing index declined more-than-anticipated to a level of 19.5 in July, hitting its lowest level since November 2016. In the prior month, the index had recorded a reading of 27.6, compared to market consensus for a drop to a level of 23.0.
In the Asian session, at GMT0300, the pair is trading at 1.1626, with the EUR trading slightly lower against the USD from yesterday’s close.
The pair is expected to find support at 1.1517, and a fall through could take it to the next support level of 1.1409. The pair is expected to find its first resistance at 1.1696, and a rise through could take it to the next resistance level of 1.1767.
With no major economic releases in the Euro-zone today, investors will focus on the flash Markit manufacturing and services PMIs for July, across the Euro-zone coupled with Germany’s preliminary inflation numbers, slated to release next week.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
