EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.95% against the USD and closed at 1.3066, as concerns that a potential political vacuum in Italy would revive worries over instability in the Euro-zone weighed on investor sentiment.
On the economic front, Italy’s merchandise trade with countries outside the European Union (EU) stood at a deficit of €2.28 billion in January, compared to the revised €3.32 billion surplus recorded in December. Meanwhile, Spain’s producer price index (PPI) rose 2.6% in January, slower than the 3.3% gain in December.
Separately, in the US, a survey from the National Association for Business Economics (NABE) indicated that, the US will grow gradually, but uncertainty surrounding the fiscal imbalances will reduce the real growth in 2013. Also, the Federal Reserve Bank of Dallas reported that the manufacturing activity index in the region dropped to a reading of 2.2 in February, from a reading of 5.5 in the previous month. Meanwhile, the Federal Reserve Bank of Chicago reported that its economic activity index retreated to a reading of -0.32 in January, from an upwardly reading of 0.25 recorded in the previous month.
Early today morning, the Federal Reserve Bank of Atlanta President, Dennis Lockhart expressed his support to continue central bank asset purchases through the end of 2013 to help improve the job market.
In the Asian session, at GMT0400, the pair is trading at 1.3054, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.2955, and a fall through could take it to the next support level of 1.2855. The pair is expected to find its first resistance at 1.3237, and a rise through could take it to the next resistance level of 1.3419.
In the US, Federal Reserve Chairman, Ben Bernanke, will deliver his semiannual testimony on monetary policy to the Senate Banking Committee and a subsequent address before the House Financial Services Committee on Wednesday.
Meanwhile, investors await the data on the US housing price index, new home sales and consumer confidence later today.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
