EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.14% against the USD and closed at 1.3758, following better-than expected Purchasing Managers’ Index (PMI) data from the Euro-zone.
The manufacturing PMI in the Euro-zone rose to a 31-month high of 52.7 in December, compared to a reading of 51.6 in November, while the preliminary services PMI fell short of expectations and edged down to 51.0 in December, from a level of 51.2 reported in the preceding month. Additionally, Germany’s manufacturing PMI rose to a 30-month high of 54.2 in December, up from 52.7 in November and above expectations for a reading of 53.0. On the contrary, the services PMI ticked down to 54.0 this month from 55.7 in November, compared to expectations for a decline to 55.5. A separate report indicated that France’s manufacturing PMI fell to a seven month low of 47.1 from 48.4 in November, while the services PMI dropped to a six month low of 47.4 from 48.0 last month. Moreover, the region posted a trade surplus of €17.2 billion in October, sharply up from a downward revised surplus of €10.9 billion in the previous month.
Yesterday, in his speech the European Central Bank (ECB) Chief, Mario Draghi stated that the recovery in the region is still fragile and the central bank’s measures still need more time to yield results. He further cast doubt on the Euro-area governments’ ways of dealing with failing banks, adding that the current proposals might be too complicated to work properly.
The US Dollar nudged lower after the US manufacturing PMI unexpectedly fell to a level of 54.4 in December, from a level of 54.7 recorded in the preceding month. Markets were expecting the index to rise to 55.0 in December. However, other data released by the US Department of Treasury indicated that the net treasury international capital (TIC) long term purchases in the US increased to $35.4 billion in October, following revised net purchase of $31.3 billion reported in September. Moreover, the US industrial production increased 1.1% on a monthly basis in November, more than market expectation of a 0.4% rise and compared to a revised increase of 0.1% recorded in October.
In the Asian session, at GMT0400, the pair is trading at 1.3769, with the EUR trading 0.08% higher from yesterday’s close.
The pair is expected to find support at 1.3738, and a fall through could take it to the next support level of 1.3706. The pair is expected to find its first resistance at 1.3800, and a rise through could take it to the next resistance level of 1.3830.
Trading trends in the pair today are expected to be influenced by important Euro-zone economic reports mainly, the consumer inflation data and the ZEW sentiment indices.
The currency pair is showing convergence with its 20 Hr moving average and is trading above its 50 Hr moving average.
