EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.2% against the USD and closed at 1.1106, after the ECB’s meeting minutes hinted for more aggressive actions on monetary easing.
The minutes of the ECB’s recent monetary policy meeting revealed that risk to the Euro-zone economy has increased in the current year, amid volatility in financial markets and turmoil in emerging economies while slowdown in China was also clouding the outlook. The minutes also indicated that the central bank would expand stimulus at its meeting next month, as the governing council was unanimous to conclude that its current policy stance needed to be reviewed and possibly reconsidered when it meets next on 10 March.
Meanwhile, the Organization for Economic Co-operation and Development (OECD), a leading think tanker, cut Euro-zone’s growth forecast to 1.4% for 2016 and 1.7% for 2017, from an earlier forecast of 1.8% and 1.9% respectively in November. It also cut the global growth forecast to 3.0% in 2016 in its interim economic outlook, from a 3.3% forecasted in November, and called for urgent action from policymakers to push up global growth.
In the US, initial jobless claims fell unexpectedly to a three-month low level of 262.0K in the week ended 13 February, thus pointing towards a resilient labour market. Meanwhile investors expected for a rise to a level of 275.0K, following a reading of 269.0K in the previous week.
In other economic news, the nation’s Philadelphia Fed Manufacturing activity index showed a continued contraction in regional manufacturing activity as it registered a level of -2.8 in February, compared to a reading of -3.5 in the previous month, thus remaining in negative territory for the sixth consecutive month.
Separately, the OECD projected the US economy to grow by 2.0% in 2016 and 2.2% in 2017, down from an earlier forecast of 2.5% and 2.4% respectively.
In the Asian session, at GMT0400, the pair is trading at 1.1124, with the EUR trading 0.16% higher from yesterday’s close.
The pair is expected to find support at 1.1080, and a fall through could take it to the next support level of 1.1036. The pair is expected to find its first resistance at 1.1159, and a rise through could take it to the next resistance level of 1.1194.
Moving ahead, investors will look forward to the Euro-zone’s preliminary consumer confidence data for February, scheduled later today. Additionally, the US consumer price index data for January, due later in the day, will also attract a lot of market attention.
The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.
