EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined marginally against the USD and closed at 1.2389.
Earlier in Asian trading session yesterday, the Euro was trading higher, after German Chancellor, Angela Merkel’s government backed the European Central Bank’s (ECB) bond-buying plan to curb the region’s debt crisis. However, the common currency came under pressure, after the ratings agency, Standard & Poor’s, lowered the outlook on Greece to ‘Negative’, citing that the nation may require additional financing for 2012 under the EU/IMF program amid delays in implementing budgetary consolidation measures. The agency further added that it could further downgrade the nation if it fails to secure the next disbursement of the said program.
Meanwhile, the Euro group President, Jean-Claude Juncker, stated that Greek exit from the Euro-zone would be “manageable” but not “desirable”.
In Greece, Finance Minister, Yannis Stournaras, stated that the country’s coalition government had yet to agree on about one-third of the needed spending cuts for 2013 and 2014 and those negotiations would continue until the end of August.
Separately, the Italian Prime Minister, Mario Monti won a confidence vote yesterday on a bill to cut spending by an extra €4.5 billion ($5.59 billion) this year in order to rein in the deficit and delay a planned increase in sales tax.
In economic news, German factory orders fell 1.7% (MoM) in June, against the expectations for a 0.8% decline. Additionally, Italy reported that its gross domestic product contracted by 0.7% in the second quarter of 2012, contracting for the fourth straight time. Moreover, industrial production in Italy decreased 1.4% (MoM) in June, compared to a revised 1.0% rise recorded in May.
In the Asian session, at GMT0300, the pair is trading at 1.2396, with the EUR trading 0.06% higher from yesterday’s close.
The pair is expected to find support at 1.2367, and a fall through could take it to the next support level of 1.2339. The pair is expected to find its first resistance at 1.2433, and a rise through could take it to the next resistance level of 1.2471.
Trading trends in the pair today are expected to be determined by the release of trade balance and industrial production data in Germany.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
