EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.64% against the USD and closed at 1.3421, as traders continue to digest report released by the German Bundesbank. According to the report, the European Central Bank would base its interest-rate policy on an inflation outlook, and would hike the rate if prices exceed forecasts.
Adding to a positive tone, the Spanish Treasury yesterday sold 6-months Letras worth €1.34 billion and €2.81 billion in 12-months Letras, with yields dropping to 0.83% and 1.253%, respectively.
Yesterday, the Fitch Ratings affirmed Netherlands “AAA” ratings, with negative outlook, citing worsening public debt dynamics and persistent economic recession.
On the economic front, Euro-zone’s construction sector output increased for a third consecutive month in June, while Germany’s producer price inflation weakened in July, defying market forecast for an increase.
In the Asian session, at GMT0300, the pair is trading at 1.3422, with the EUR trading tad higher from yesterday’s close.
The pair is expected to find support at 1.3345, and a fall through could take it to the next support level of 1.3268. The pair is expected to find its first resistance at 1.3476, and a rise through could take it to the next resistance level of 1.3530.
With no key European releases in store today, the common currency is likely to be influenced by economic releases from the US and the all important FOMC minutes scheduled ahead today.
The currency pair is showing convergence with its 20 Hr moving average and is trading above 50 Hr moving average.
