EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.17% against the USD and closed at 1.1050, after the European Union (EU) Commission downgraded Euro-zone’s growth forecast for 2019 and 2020.
The European Central Bank (ECB), in its economic bulletin report, indicated that Euro-zone’s economy will demonstrate positive growth by expanding modestly in the second half of 2019, buoyed by private consumption and a slight growth in employment. However, risks to the global economy remain to the downside, amid a further escalation of trade disputes, uncertainties surrounding Brexit and a potentially slowdown in global economy.
The European Commission (EU), in its quarterly report, lowered its economic growth forecast for the Euro-zone to 1.1% in 2019 from 1.2% predicted in July and to 1.2% in 2020, citing ongoing trade disputes, geopolitical tensions and Brexit. Further, the Commission forecasted the region’s aggregate budget deficit to rise to 0.8% in 2019 and to 0.9% in 2020 and 1.0% in 2021, up from an historic low of 0.5% of GDP in 2018. Also, it expects inflation to be at 1.2% this year and next, rising to 1.3% in 2021.
Separately, Germany’s seasonally adjusted industrial production dropped 0.6% on a monthly basis in September, more than market expectations for a fall of 0.4%. In the previous month, industrial production had recorded a revised rise of 0.4%.
In the US, data showed that the consumer credit advanced less-than-expected by $9.51 billion in September, rising at its slowest pace since June 2018 and compared to a revised rise of $17.84 billion in the prior month. Market participants had envisaged consumer credit to register a climb of $15.0 billion. Meanwhile, the number of American filling for fresh unemployment benefits eased to a 1-month low level of 211.0K in the week ended 01 November 2019, more than market expectations for a drop to a level of 215.0K. Initial jobless claims had recorded a revised level of 219.0K in the previous week.
In the Asian session, at GMT0400, the pair is trading at 1.1052, with the EUR trading marginally higher against the USD from yesterday’s close.
The pair is expected to find support at 1.1028, and a fall through could take it to the next support level of 1.1004. The pair is expected to find its first resistance at 1.1084, and a rise through could take it to the next resistance level of 1.1116.
Going ahead, traders would await Germany’s trade balance data for September, set to release in a few hours. Later in the day, the US Michigan consumer sentiment index for November, will keep traders on their toes.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
