EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.50% against the USD and closed at 1.2628. The greenback came under pressure after weak economic data in the US, raised speculation of additional Fed stimulus. Data released in the US showed that consumer prices declined while jobless claims increased.
On the other hand, the European Central Bank (ECB), in its monthly bulletin, stated that it sees increased downside risk in the regions’ economic outlook and forecasted inflation would stay above its target rate of 2% this year.
On the economic front, German wholesale price index declined 0.7% (MoM) in May, from 0.5% gain in April. Additionally, Euro-zone consumer price inflation fell less-than-expected by 0.1% (MoM) in May, against the market expectation of 0.2% fall.
In a bond auction, Italy paid 5.3% to raise €3 billion ($3.76 billion) for three-year government bonds maturing in March 2015, up from 3.91% last month and the highest level since December 2011. Separately, Spanish 10-year yields rose to a euro-era record to 7.0%.
Meanwhile, Group of 20 officials stated that the central banks from major economies are preparing coordinated action if the results of Greek elections this weekend lead to turmoil in financial markets.
Separately, German Chancellor, Angela Merkel, rejected “miracle solutions” such as issuing joint euro bonds or creating a Europe-wide deposit guarantee scheme, stating such proposals were counterproductive and would violate the German constitution.
In the Asian session, at GMT0300, the pair is trading at 1.2629, with the EUR trading flat from yesterday’s close.
The pair is expected to find support at 1.2568, and a fall through could take it to the next support level of 1.2508. The pair is expected to find its first resistance at 1.2663, and a rise through could take it to the next resistance level of 1.2697.
Trading trends in the pair today are expected to be determined by the release of Euro-zone employment change and trade balance data. Investors also remain cautious ahead of Sunday’s closely watched general election in Greece.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
