EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.60% against the USD and closed at 1.2885, after Euro-zone manufacturing data came in better-than-expected.
In the Euro-zone, manufacturing purchasing managers’ index (PMI) rose to a six-month high of 46.1 in September, while the unemployment rate stood stable at 11.4% in August. In Germany, the manufacturing PMI rose to 47.4 in September, while in France it plunged to 42.7 in September, the lowest since April 2009. Additionally, Italian and Spanish manufacturing PMI rose to 45.71 and 44.6, respectively, in September.
Yesterday, the European Commissioner for Economic and Monetary Affairs, Olli Rehn, stated that European powers are “ready to act” if Spain seeks a sovereign bailout, citing that it had the necessary instruments at its disposal in case there would be a request from any member state of the Euro area.
Meanwhile, the Moody’s Investors Service reported that the Spanish banks would face a capital shortfall between €70- €105 billion ($90-$135 billion), almost double the estimate the government provided last week.
Additionally, credit ratings agency, Fitch, stated that the latest budget cuts and a key audit on the health of Spanish banks would not affect its rating on the country’s sovereign debt.
Meanwhile, the Greek finance ministry reported that the country was headed for a 3.8% economic contraction, unveiling a draft budget that forecast a sixth year of recession.
In the Asian session, at GMT0300, the pair is trading at 1.2895, with the EUR trading 0.08% higher from yesterday’s close.
The pair is expected to find support at 1.2824, and a fall through could take it to the next support level of 1.2752. The pair is expected to find its first resistance at 1.2952, and a rise through could take it to the next resistance level of 1.3010.
In the day ahead, investors are eyeing producer price index in the Euro-zone.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
