EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.54% against the USD and closed at 1.3583, following upbeat Euro-zone and German services PMI data.
In the Euro-zone, the final services PMI climbed to a reading of 48.6 in January, above the flash estimate of 48.3 and compared to December’s reading of 47.8, while in Germany, services PMI climbed to a reading of 55.7 in January, from a reading of 52.0 in December, against the preliminary estimate for a reading of 55.3. Also, the final composite output index in Euro-zone rose to a reading of 48.6 in January, above its earlier flash estimate of 48.2 and compared to the previous month’s reading of 47.2.
However, gains were capped as the annual retail sales in the Euro-zone slipped 3.4% in December, compared to a revised 1.9% fall recorded in November. Meanwhile, in France, services business activity index fell to a reading 43.6 in January, in line with the flash estimates and compared to a reading of 45.2 in December.
The greenback also came under pressure as the US Institute for Supply Management (ISM) reported that, its non-manufacturing index edged down to a reading of 55.2 in January, from a downwardly revised reading of 55.7 recorded in December. Market had expected the index to drop to a reading of 55.1 in January. However, the IBD/TIPP economic optimism in the US rose to a reading of 47.3 in February, in-line-with-market-expectations and compared to a reading of 46.5 recorded in the previous month.
Moreover, the Congressional Budget Office (CBO) indicated that the US economy would expand at a slower pace this year, with real Gross Domestic Product growing by just 1.4%, if fiscal tightening including automatic cuts are allowed to go into effect. The agency also reported that the US government would post an U$845.0 billion budget deficit in 2013, the lowest since 2008.
In the Asian session, at GMT0400, the pair is trading at 1.3577, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.3491, and a fall through could take it to the next support level of 1.3404. The pair is expected to find its first resistance at 1.3631, and a rise through could take it to the next resistance level of 1.3684.
Trading trends in the pair today are expected to be determined by the release of factory orders data in Germany.
The currency pair is trading just above its 20 Hr and 50 Hr moving averages.
