EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.38% against the USD and closed at 1.3453, after the G7 pledged not to engage in currency devaluations, thereby easing investor fears that the European Central Bank would react to recent Euro strength with monetary easing measures that would depreciate the single currency. The Euro held gains, following remarks by European Central Bank President, Mario Draghi that Spain was on the right track of recovery and that the nation’s banks were properly capitalized and in a position to give credit.
However, Spain saw borrowing costs edge higher at an auction of 12-month government bonds. Spain’s Treasury sold €3.02 billion worth of 12-month government bonds at an average yield of 1.548% earlier in the day, up from 1.472% at a similar auction last month.
In the US, the Treasury Department unexpectedly reported a budget surplus of $2.9 billion in January 2013, the first surplus in five years and compared to a $27.4 billion deficit recorded in January 2012.
Meanwhile, the US President, Barack Obama, in his annual State of the Union address, urged the Congress to support his plans to create jobs for the middle-class and spur investment in infrastructure projects in a move to boost economic growth. He also assured to begin talks of free trade between the US and European Union to revive the job market and boost exports.
In the Asian session, at GMT0400, the pair is trading at 1.3448, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.3382, and a fall through could take it to the next support level of 1.3317. The pair is expected to find its first resistance at 1.3495, and a rise through could take it to the next resistance level of 1.3543.
Trading trends in the pair today are expected to be determined by the release of Germany’s wholesale price index and the industrial production in the Euro-zone. Meanwhile, in the US, retail sales data is keenly eyed by investors.
The currency pair is showing convergence with its 20 Hr moving average and is trading above its 50 Hr moving average.
