EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.19% against the USD and closed at 1.3656. However, losses were capped after data revealed that the current account surplus in the Euro-zone widened to reach the highest level in six months. The current account surplus unexpectedly rose to €21.8 billion in October, compared to a revised surplus of €14.9 billion recorded in the earlier month.
Separately, national statistics institute INSEE indicated that France would avoid dipping back into recession at the end of this year by posting 0.4% growth in the fourth quarter. It further stated that growth would slacken again in the first half of 2014, leaving the high French unemployment rate little changed. Yesterday, the European Central Bank (ECB) Chief, Mario Draghi welcomed the deal among EU finance ministers to set up an agency and network of funds to close troubled banks in the region, however he urged quick talks in order to finalise the law as soon as possible. Meanwhile, the International Monetary Fund (IMF) suggested that a tougher budget may be needed in 2015 to ensure that the crucial EU deficit target is met.
In the US, the Department of Labour reported that initial jobless claims in the US increased by 10K for the week ended 14 December 2013 to a seasonally adjusted 379K, from a revised 369K recorded in the prior week. Moreover, existing home sales dropped for the third straight month by a seasonally adjusted annual rate of 4.3%, decreasing to 4.90 million in November, from a figure of 5.12 million recorded in the previous month. The Federal Reserve Bank of Philadelphia reported that manufacturing activity continued to expand modestly in its region, wherein the manufacturing activity index increased to a reading of 7.0 in December, lesser than market expectation for a level of 10.0 and following a level of 6.5 reported in the preceding month.
In the Asian session, at GMT0400, the pair is trading at 1.3636, with the EUR trading 0.15% lower from yesterday’s close.
The pair is expected to find support at 1.3615, and a fall through could take it to the next support level of 1.3593. The pair is expected to find its first resistance at 1.3675, and a rise through could take it to the next resistance level of 1.3713.
Trading trends in the pair today are expected to be determined by the crucial GDP data from the US and the Fed Chairman’s nomination vote, wherein the US Senate will vote to pass or reject the nomination of Janet Yellen as Federal Reserve Chairperson until February 2018. In the Euro-zone, data from the peripheries mainly the Gfk consumer confidence survey in Germany would be on investors’ radar. The December consumer confidence data in the Euro-zone is also expected to be closely eyed by investors.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
