EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.80% against the USD and closed at 1.3818.
The greenback advanced against the Euro-zone’s common currency after the US Fed, in its 2-day policy meeting, trimmed the size of its stimulus package by yet another $10 billion to $55 billion a month and hinted the possibility for an interest rate hike by the middle of next year. However, at the same time, the Fed Chief, Janet Yellen also opined that the US economy was not close to its objectives for full employment and price stability, and hence assured that interest rates would continue to remain low for a “considerable time”. Furthermore, she noted that the central bank’s earlier 6.5% unemployment threshold was no longer the only factor in deciding the future of interest rates in the nation, instead the Fed would now consider a “wide range of information,” including labour market conditions, inflation expectations and financial markets for deciding on how long to keep its key interest rates low.
Meanwhile, in the Euro-zone, the Eurostat reported that, on a seasonally adjusted basis, construction output in the region rose 1.5% (MoM) in January, faster than previous month’s revised increase of 1.3%. Meanwhile, in the US the existing home sales data to be released today would help investors validate the recent upswing witnessed in the housing sector.
In the Asian session, at GMT0400, the pair is trading at 1.3831, with the EUR trading 0.09% higher from yesterday’s close.
The pair is expected to find support at 1.3783, and a fall through could take it to the next support level of 1.3735. The pair is expected to find its first resistance at 1.3905, and a rise through could take it to the next resistance level of 1.3979.
Looking ahead, traders would eye the outcome of the European Council meeting and a report on Germany’s producer price index for further cues in the Euro.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
