EURUSD Movement
On Friday, EUR rose 0.50% against the USD and closed at 1.3763, following upbeat economic releases from France, Greece and Spain. The Euro also received support, after German Bundesbank President and a member of the European Central Bank’s Governing Council, Jens Weidmann, warned that low inflation in the region should not be used as a reason to keep interest rates low.
The National Institute of Statistics and Economic Studies (INSEE) reported that the producer price index in France increased 0.5% on a monthly basis in November, compared to a revised 0.3% decline posted in the previous month. Additionally, the Bank of Spain posted that current account surplus in Spain widened to €1.7 billion in October, compared to a revised surplus of €0.1 billion recorded in September. Moreover, the producer price index in Greece declined 0.7% on an annual basis in November, but at a slower pace than in the previous month, following a drop of 1.6% recorded in the earlier month.
The European Central Bank Governing Council member, Jens Weidmann warned that keeping interest rates low for an extended period of time could negatively affect Euro-zone economies’ reform policies. He further added that low inflation pressures do not give a license for arbitrary monetary easing.
Meanwhile, the ECB Chief, Mario Draghi reiterated his earlier stance that the central bank is in no hurry to slash the region’s interest rate further, amid encouraging signs, including economic recoveries in some countries, easing trade imbalances and shrinking budget deficits.
In the Asian session, at GMT0400, the pair is trading at 1.3742, with the EUR trading 0.15% lower from Friday’s close.
The pair is expected to find support at 1.3685, and a fall through could take it to the next support level of 1.3627. The pair is expected to find its first resistance at 1.3847, and a rise through could take it to the next resistance level of 1.3951.
Towards the end of the week, investors would turn their attention to key economic releases from the Euro-zone, mainly the consumer price inflation and manufacturing PMI numbers.
The currency pair is trading between its 20 Hr and 50 Hr moving averages.
