EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.81% against the USD and closed at 1.3409, after the European Central Bank (ECB) unexpectedly slashed its interest rate by 25 basis points to 0.25%. Negative sentiment was also fuelled after the ECB President, Mario Draghi, warned of a prolonged low inflation risk to the Euro-zone economy and stated that “the central bank’s monetary policy stance would remain accommodative for as long as necessary.”
The euro felt further pressure, after data revealed that seasonally adjusted industrial production in Germany declined 0.9% (MoM) in September, more than the market estimate for a 0.2% fall and compared to a 1.6% rise recorded in the previous month.
Meanwhile, in the US, an official report revealed that the nation’s Gross Domestic Product (GDP) advanced at an annual rate of 2.8% in the third quarter, surpassing market expectations for a 2.0% rise and compared to a 2.5% increase seen in the previous quarter. Another report showed that initial jobless claims in the nation declined slightly lesser-than-expected to a level of 336,000 for the week ended November 2, following a reading of 345,000 registered in the earlier week. Separately, the Fed Governor, Jeremy Stein stated that despite the recent regulatory measures undertaken to improve capital levels and liquidity at large banks, the US financial system was still at risk. He also suggested that more action was needed to combat risks stemming from money-market mutual funds and short-term financing agreements.
In the Asian session, at GMT0400, the pair is trading at 1.3408, with the EUR trading tad lower from yesterday’s close.
The pair is expected to find support at 1.3292, and a fall through could take it to the next support level of 1.3176. The pair is expected to find its first resistance at 1.3527, and a rise through could take it to the next resistance level of 1.3646.
Traders are expected to keep a close watch on Germany’s trade balance data, scheduled to release later today, for further guidance in the Euro.
The currency pair is showing convergence with its 20 Hr moving average and is trading below its 50 Hr moving average.
