EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.23% against the USD and closed at 1.3655, hurt by the latest batch of soft economic releases from the Euro-zone and its member nations. Data showed that Markit’s Euro-zone’s preliminary manufacturing PMI fell to a 6-month low reading of 52.5 in May while activities in Euro-zone’s service sector unexpectedly accelerated in May, bringing the region’s preliminary composite PMI to match analysts’ expectations of 53.9. Likewise, Germany’s preliminary Markit service PMI also surprisingly rose but its manufacturing PMI declined to a 6-month low level of 52.9 in May. Additionally, an index on French business climate fell in May as PMIs for France’s manufacturing and service sector declined more than economists’ expectations in May.
Adding to the pressure on the common currency, ECB policymaker, Jens Weidmann, in a speech in Frankfurt, stated that the ECB was willing to embrace additional unconventional measures as an extended period of low inflation in the Euro-zone could have a detrimental effect on the economy.
In a noteworthy development, the Fitch Ratings expressed optimism on the outlook of the Greece economy and indicated that it would raise the nation’s credit rating to “B” from “B-.”
Meanwhile, in the US, the San Francisco Fed President, John Williams opined that the US Fed has finally moved back to “normal” monetary policy while indicating that the central bank would clarify its interest rates guidance.
On the economic front, the preliminary reading of the US Markit manufacturing PMI rose to a 3-month high level of 56.2 in May while the CB leading index rose for the third straight month in April. However, the US jobless claims rose more-than-expected by 28,000 to 326,000, last week and the US existing home sales failed to match analysts’ expectations in April even as it rose for the first time this year.
In the Asian session, at GMT0300, the pair is trading at 1.3651, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.3631, and a fall through could take it to the next support level of 1.3612. The pair is expected to find its first resistance at 1.3679, and a rise through could take it to the next resistance level of 1.3708.
Later today, traders would closely monitor Germany’s GDP and the IFO economic data along with Italy’s retail sales, wage inflation and trade balance data, for further cues in the Euro.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
