EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.47% against the USD and closed at 1.3400, after Standard & Poor’s lowered Greece long-term ratings to “selective default”. Further depressing the sentiment, the Moody’s Investors Service stated that Greek default risk “remains high.”
EUR pared some of its losses after Germany’s lower house of parliament approved a second Greek bailout package worth €130 billion.
On the economic front, the M3 money supply growth in the Euro-zone grew 2.5% (YoY) in January. Additionally, the Leading Economic Index in the Euro-zone rose for the second consecutive month to 104.1 in January, while the Coincident Economic Index remained unchanged at 102.6 in January. Moreover, the Producer Price Index (PPI) in France advanced 0.6% (MoM) in January.
Separately, Italy’s six-month borrowing costs fell at an auction yesterday, as it sold €12.25 billion in short-term bills, meeting strong demand. However, the German bund auction failed to meet the target of the €3 billion twelve-month bills offer, with the yield rising to 0.77% compared to 0.70% previously.
In the Asian session, at GMT0400, the pair is trading at 1.3428, with the EUR trading 0.21% higher from yesterday’s close, as the European Central Bank prepares to allot a second round of unlimited three-year funds tomorrow, to help shore up the region’s banks.
The pair is expected to find support at 1.3375, and a fall through could take it to the next support level of 1.3322. The pair is expected to find its first resistance at 1.3473, and a rise through could take it to the next resistance level of 1.3518.
With a series of Euro-zone economic releases today, including consumer confidence and business climate indicator, trading in the pair is expected to be influenced by the resulting cues from these releases.
The currency pair is trading between its 20 Hr and 50 Hr moving averages.
