EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.56% against the USD and closed at 1.2959, as disappointing economic data from the Europe dampened investors risk appetite.
Industrial production in the Euro-zone fell 0.4% (MoM) in January, compared to a 0.9% rise recorded in the previous month. Additionally, the nonfarm payrolls in France declined 0.3% (QoQ) in the Q42012, compared to a revised 0.2% drop recorded in the previous quarter.
Investor sentiment further dented after a debt auction in Italy saw long-term funding costs rise as the Treasury sold three-year and 15-year bonds at its first bond auction since Fitch cut the country’s credit rating. Investors would now turn their focus to a Spanish bond auction scheduled later in the day, with Madrid offering debt maturing in 2029, 2040 and 2041.
Meanwhile, the US Dollar gained momentum on better-than-expected US data. Retail sales in the US rose 1.1% in February, following an upwardly revised 0.2% increase recorded in January. Market had expected the retail sales to edge up 0.5% in February. Besides, the US Commerce Department reported that the business inventories in the US rose 1.0% (MoM) in January, following a revised 0.3% growth recorded in December. Market had expected the business inventories to rise 0.5% in January, compared to the 0.1% growth originally reported for the previous month. Additionally, the US budget deficit narrowed to $203.5 billion in February, from a $231.7 billion deficit reported in the same period last year.
In the Asian session, at GMT0400, the pair is trading at 1.2946, with the EUR trading 0.10% lower from yesterday’s close.
The pair is expected to find support at 1.2891, and a fall through could take it to the next support level of 1.2835. The pair is expected to find its first resistance at 1.3034, and a rise through could take it to the next resistance level of 1.3121.
Later today, the ECB is scheduled to release its monthly bulletin, which gauges current and future economic conditions from the bank’s viewpoint. Additionally, the European Union leaders are to hold the first day of a two-day economic summit.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
