EURUSD Movement
For the 24 hours to 23:00 GMT on Friday, the EUR declined 0.47% against the USD and closed at 1.2852, amid risk aversion among investors following the weak US manufacturing and confidence data.
In the US, the Chicago purchasing managers’ index fell to 49.7 in September, contracting for the first time since September 2009, while the Thomson Reuters/University of Michigan’s final consumer sentiment index fell to a seasonally adjusted 78.3 in September.
Meanwhile, the Bank of Spain reported that an independent audit of the country’s troubled banks shows they would need an extra €59.3 billion to cover from further economic shocks.
Unveiling his first budget, the French President, Francois Hollande has heavily tightened spending and raised taxes on the rich to bring the government deficit sharply down by next year. The government plans to cut its 2013 budget deficit to 3% of gross domestic product from 4.5% in 2012. The budget forecasts economic growth of just 0.8% in 2013.
In economic news, the Euro-zone inflation rose to an annual rate of 2.7% in September, from 2.6% in August. Meanwhile, German retail sales fell 0.8% (YoY) in August, compared to a 1.6% drop in July.
In France, the Gross Domestic Product (GDP) remained flat for the third straight time in the Q2 FY2012, as estimated. Additionally, consumer spending in France fell 0.8% (MoM) in August, while overall producer prices increased at a faster rate of 1.2% (MoM) in August, than the rate of 0.4% in July.
Over the weekend, the Spanish detailed budget document showed that the nation’s debt as a ratio of GDP would reach 90.5% by end 2013 after hitting 85.3% of GDP by the end of this year.
Separately, the Greek Prime Minister, Antonis Samaras, stressed the urgency of sealing an austerity pact with the nation’s so-called troika of international creditors, citing the nation’s financial system was desperate for the cash injection.
In the Asian session, at GMT0300, the pair is trading at 1.2819, with the EUR trading 0.26% lower from Friday’s close.
The pair is expected to find support at 1.2762, and a fall through could take it to the next support level of 1.2705. The pair is expected to find its first resistance at 1.2918, and a rise through could take it to the next resistance level of 1.3017.
Trading trends in the pair today are expected to be determined by the release of purchasing manager index manufacturing and unemployment rate in the Euro-zone.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
