EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.05% against the USD and closed at 1.2117, amid concerns that Spain would have to seek a full sovereign bailout.
The Euro slid two-year low against the dollar, as Murcia became the second Spanish region to request financial assistance from the government after Valencia, and amid indications that more regions would follow suit.
The concern over Spain increased after the country’s central bank stated that the economy had contracted by 0.4% during the second quarter and after yields on Spanish 10-year bonds rose to a record 7.57%.
Adding to the gloom, Moody’s Investors Service changed its outlook for Germany, the Netherlands and Luxembourg to ‘Negative’ from ‘Stable’, citing rising uncertainty over Europe’s debt crisis. Meanwhile, it affirmed Finland’s ‘Aaa’ rating and stable outlook.
In a bond auction, Germany sold €2.703 billion of its 12-month treasury bill with a yield at -0.0540%, less than 0.01915% paid on June 25.
In economic news, consumer confidence in the Euro-zone fell more-than-expected to -21.6 in July, making it five-year low.
Meanwhile, the World Trade Organization (WTO) Director, Pascal Lamy, stated there would be major challenge in the weeks and the months to come for the Euro-zone and the rest of the world, citing condition in Euro-zone is ‘very difficult’.
In the Asian session, at GMT0300, the pair is trading at 1.2125, with the EUR trading 0.07% higher from yesterday’s close.
The pair is expected to find support at 1.2080, and a fall through could take it to the next support level of 1.2034. The pair is expected to find its first resistance at 1.2158, and a rise through could take it to the next resistance level of 1.2190.
Trading trends in the pair today are expected to be determined by the release of service and manufacturing Purchasing Manager Index (PMI) data in Germany, France and the Euro-zone.
The currency pair is trading between its 20 Hr and 50 Hr moving averages.
