EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.11% against the USD and closed at 1.3299. The US Dollar was in demand yesterday, on speculation that a better-than-expected US jobs data might facilitate Fed’s decision to taper its asset-purchase programme, at its upcoming policy meeting, next week. Data showed that initial jobless claim in the US declined to a level of 292,000 during the week ended September 06, 2013, defying market expectation for a rise to 330,000 from a reading of 323,000 registered in the previous week. Moreover, the US budget deficit narrowed to $147.9 billion in August from a $190.5 billion deficit posted in the same period last year.
Meanwhile, traders reduced their Euro exposures, after a report showed that, on a seasonally adjusted basis, industrial production in the Euro-region declined 1.5% (MoM) in July, defying market expectation for a rise of 0.1% and compared to a 0.6% increase recorded in the previous month. Additionally, unemployment continued to rise in recession-hit Greece, with the overall rate reaching 27.9% in June. Even worse, 58.8% of people under age 25 were out of work.
Yesterday, the European Central Bank (ECB) President, Mario Draghi, stated that the recovery of the Euro-zone economy was still “very, very green”. Commenting on the recent rise in bank-to-bank borrowing costs, he said that the short-term money market interest rates were “unwarranted” and that the central bank is not running out of options at all.
Separately, a report indicated that the lawmakers backed a plan to set European Central Bank (ECB) as a single supervisor of all Euro-area banks as early as October 2014, in a vote in Strasbourg, France.
In the Asian session, at GMT0300, the pair is trading at 1.3285, with the EUR trading 0.11% lower from yesterday’s close.
The pair is expected to find support at 1.3252, and a fall through could take it to the next support level of 1.3220. The pair is expected to find its first resistance at 1.3321, and a rise through could take it to the next resistance level of 1.3358.
Investors await the release of Euro-zone’s construction, employment and trade balance data, due later today to gauge further directions of the Euro.
The currency pair is trading just below its 20 Hr and 50 Hr moving averages.
