EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 0.15% against the USD and closed at 1.3610, The US Dollar extended its fall on Fed’s dovish outlook on the US economy. However, yesterday, official data showed that jobless claims in the US economy fell by 6,000, more than analysts’ expectations, to 312,000 in the week ended 14 June 2014 while Philadelphia Fed manufacturing index advanced to an 8-month high reading of 17.8 in May. Separately, the US CB leading indicators rose 0.5% (MoM) in May, for the fourth straight month, but failed to match market expectations for a 0.6% rise.
Meanwhile, in the Euro-zone, ECB Vice President, Vitor Constancio hinted that the central bank stands “ready to deploy additional unconventional instruments”, including a broad-based asset-purchase programme, should “the likelihood of protracted low inflation” increase in the economy. Separately, the IMF Managing Director, Christine Lagarde urged the ECB to mull implementing a quantitative easing measure, “by way of purchasing of sovereign bonds” in the Euro-zone if inflation in the bloc remains low for a protracted period of time. However, another ECB policymaker, Ignazio Visco, rubbished concerns on deflation risks in the Euro-bloc by stating that he did not see any “obvious evidence of a deflationary move” in the region. Meanwhile, during his interview with Bloomberg, an ECB Supervisory Board member, Andreas Dombret, highlighted the need for a revival in Europe’s asset-backed securities market, as according to him, banks are “profiting from this” and “are making the market in this.”
In the Asian session, at GMT0300, the pair is trading at 1.3617, with the EUR trading slightly higher from yesterday’s close.
The pair is expected to find support at 1.3586, and a fall through could take it to the next support level of 1.3555. The pair is expected to find its first resistance at 1.3646, and a rise through could take it to the next resistance level of 1.3675.
During the later course of the day, traders would eye Euro-zone’s consumer confidence and current account balance data, for further cues in the Euro.
The currency pair is showing convergence with its 20 Hr moving average and is trading above its 50 Hr moving average.
