EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined marginally against the USD and closed at 1.3307, as the International Monetary Fund (IMF) lowered its growth forecast for the world economy in 2013, citing that the sovereign debt crisis in Europe continues to pose a large downside risk to the economy and urged policymakers to address the downside risks in order to bolster economic growth.
On the economic front, Euro-zone’s consumer confidence index rose to a reading of -23.9 in January, compare to a reading of -26.3 recorded in the previous month. Market had expected the index to rise to a reading of -26.0 in January. Meanwhile, the business sentiment index in France fell to 86.0 in January, against the forecast for a rise to 90.0 and following a reading of 89.0 in December. Also, Italy’s trade balance widened to €3.3 billion in December, compared to a revised surplus of €1.9 billion in November.
In a key development, the US House of Representatives approved a legislation to extend the debt ceiling until 19 May 2013 thereby giving more time to US leaders to discuss about spending cuts issue.
Meanwhile, in the US, the house price index climbed 0.6% in November, compared to a similar rate of growth recorded in the previous month. Moreover, according to the Mortgage Bankers Association (MBA), for the week ended 18 January 2013, mortgage application volume, on a seasonally adjusted basis, rose 7.0% from one week earlier. Additionally, the refinancing demand for the week gained 7.7% from the week before.
In the Asian session, at GMT0400, the pair is trading at 1.3314, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.3267, and a fall through could take it to the next support level of 1.322. The pair is expected to find its first resistance at 1.3358, and a rise through could take it to the next resistance level of 1.3402.
Investors await the manufacturing and services PMI in France, Germany and the Euro-zone later today. In the US investors eye the manufacturing PMI and the initial jobless claims due later today.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
