EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 1.24% against the USD and closed at 1.2857, after head of the Eurogroup, Jeroen Dijsselbloem, reportedly stated that the rescue program agreed for Cyprus represents a new template for resolving Euro-zone banking problems and that other countries may have to restructure their banking sectors.
Moreover, adding to investors’ worries, Italian daily, Corriere della Sera ran a story regarding traders’ fears of an impending sovereign debt downgrade of Italy by Moody’s.
Meanwhile, in the US, the Federal Reserve Chairman, Ben Bernanke, stated that the central bank’s monetary easing measures are supporting the recovery in other global economies as well. He further added that low interest rates in advanced nations benefit the world economy while not creating a disruptive diversion of trade through weaker currencies.
Similar views were echoed by the New York Federal Reserve President, William Dudley, who indicated that the US central bank must maintain its accommodative stance, as the labour market remains “far from healthy” despite signs of improving economic conditions.
In US economic news, the Dallas Federal Reserve Bank reported that on a seasonally adjusted basis its Fed Manufacturing Business Index surged to a reading of 7.4 in March, while the Chicago Federal Reserve Bank’s National Activity Index rose to a reading of 0.44 in February.
In the Asian session, at GMT0400, the pair is trading at 1.2866, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.2780, and a fall through could take it to the next support level of 1.2695. The pair is expected to find its first resistance at 1.3000, and a rise through could take it to the next resistance level of 1.3135.
In the Euro-zone, France is to produce official data on consumer confidence, wherein investors expect as marginally drop in March. Also, later today, the US is to release a flurry of economic data with government reports on durable goods orders and new home sales as well as a report on consumer confidence.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
