EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.24% against the USD and closed at 1.2943, on a weaker-than-expected German sentiment survey and uncertainty over whether and when Spain would seek a bailout.
In Germany, the business climate index fell to a reading of 101.4 in September, from 102.3 in August. Market had expected a reading to rise marginally to 102.5. Separately, the current assessment index dropped to 110.3 in September, following a reading of 111.1 in August. Additionally, the business expectations index edged down to 93.2 in September, from 94.2 in August. Analysts had expected a reading of 95.0.
Yesterday, the European Union’s Competition Commissioner, Joaquin Almunia, stated that the uncertainty as to whether Spain would request a sovereign bailout is “highly risky” and potentially more costly than a quick decision either way.
Moreover, concerns over Greece came back into spotlight after German magazine, Der Spiegel, reported on Sunday that the country must close a budget gap of €20 billion, almost double previous estimates, to satisfy conditions for emergency aid. However, a representative from the Greek Ministry of Finance yesterday denied the reports and said that the country is only negotiating a €11.5-billion cut in expenditures with the so-called Troika of international lenders, as well as finding a way to raise €2 .0 billion in revenue.
Meanwhile, the head of the International Monetary Fund (IMF), Christine Lagarde, called for urgent action from policy makers in Europe and the US to secure the global recovery.
In the Asian session, at GMT0300, the pair is trading at 1.2940, with the EUR trading marginally lower from Yesterday’s close.
The pair is expected to find support at 1.2896, and a fall through could take it to the next support level of 1.2853. The pair is expected to find its first resistance at 1.2978, and a rise through could take it to the next resistance level of 1.3016.
The pair is expected to take cues from the release of German GfK consumer confidence survey and French bond auction in the day ahead.
The currency pair is trading between its 20 Hr and 50 Hr moving averages.
