EURUSD Movement
For the 24 hours to 23:00 GMT on Friday, EUR declined 0.37% against the USD and closed at 1.3325, as downbeat consumer sentiment data in the US turned investors away from riskier assets and go long on the safe-haven dollar.
In the US, according to a report released by Thomson Reuters and the University of Michigan, the preliminary reading on the Consumer Sentiment Index for January stood at a reading of 71.3 in January, hitting its lowest level since December of 2011 and compared to the final reading of 72.9 recorded in December. Market had expected the index to rise to a reading of 75.0 in January.
Moreover, Eric Cantor, the House Majority Leader, stated that Republicans would take up a bill this week to extend the US debt ceiling for three months in an attempt to push the deadline and force the Senate to pass a budget.
On Friday, the Bank of Italy indicated that the country’s economy would contract by 1% in 2013, as tight credit conditions and a gloomy international backdrop darken the domestic outlook before a national election in February. It also warned that the budget deficit might not have fallen below 3.0% of output last year, which would stop Italy from exiting the EU’s excessive deficit procedure, despite austerity measures imposed by Mario Monti’s government. Moreover, on a seasonally adjusted monthly basis, industrial orders in Italy dropped 0.5% in November, compared to an upwardly revised gain of 0.1% reported in the previous month. Additionally, the seasonally adjusted industrial sales declined 0.2% (MoM) in November.
In the Asian session, at GMT0400, the pair is trading at 1.3323, with the EUR trading marginally lower from Friday’s close.
The pair is expected to find support at 1.3269, and a fall through could take it to the next support level of 1.3216. The pair is expected to find its first resistance at 1.3388, and a rise through could take it to the next resistance level of 1.3454.
In economic news, investors await the German producer price index data due later today. Also scheduled today is the Euro-group meeting in Brussels, featuring the assessment of Spain, Cyprus and Greece.
The US markets are closed today on account of Martin L. King’s Day.
The currency pair is showing convergence with its 20 Hr moving average and is trading below its 50 Hr moving average.
