EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.19% against the USD and closed at 1.3211, as risk aversion returned and market participants remained cautious as the focus shifted to Spain and away from Greece.
Spanish bond yields climbed to their highest levels in over a month while the 10-year Italian bond yield topped the psychological 5% mark for the first time in two weeks as concerns over slow progress in boosting its finances undermined investor sentiment.
Ratings agency, Fitch stated that there is ‘little prospect’ for a real Greek recovery before 2014 and that the nation would remain in recession throughout this year.
Meanwhile, the President of the European Central Bank (ECB), Mario Draghi stated that the worst of the Euro-zone crisis is over and the ECB would act if inflation risks increase.
In Germany, leading economic indicator increased 0.3% to 103.8 in January compared to the 0.7% growth recorded in December. Additionally, the coincident economic index climbed 0.3% to 106.8 in January.
Meanwhile, Germany during bond auction, sold €5 billion of 0.25% notes due in March 2014 at an average yield of 0.31%, compared with 0.25% at the prior auction in February. Aditionally, Portugal sold €1.61 billion of March 22 2013 Treasury bills at an average yield of 3.652%, down from 4.943% at the previous auction on February 15.
In the Asian session, at GMT0400, the pair is trading at 1.3230, with the EUR trading 0.14% higher from yesterday’s close.
The pair is expected to find support at 1.3177, and a fall through could take it to the next support level of 1.3125. The pair is expected to find its first resistance at 1.3283, and a rise through could take it to the next resistance level of 1.3337.
Trading trends in the pair today are expected to be determined by the release of consumer confidence, industrial new orders and Purchasing Manager Index data in the Euro-zone
The currency pair is showing convergence with its 20 Hr and trading below its 50 Hr moving average.
