EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.63% against the USD and closed at 1.3375, after Spain successfully sold over €4.5 billion of bonds maturing in 2015, 2018 and 2041. The Euro further cemented gains as risk appetite increased among investors after the release of better-than-expected employment and housing data in the US.
The seasonally adjusted housing starts in the US rose 12.1% (MoM) to annual rate of 954,000 in December, the highest annual rate since June 2008 and from the a downwardly revised 4.3% drop or 851,000 starts in November. Moreover, for the week ended 12 January 2013, initial jobless claims declined to 335,000, the lowest level since January 2008 and compared to the previous week’s revised figure of 372,000. However, for the week ended 5 January 2013, continuing claims rose to 3.214 million, compared to the preceding week’s revised level of 3.127 million.
In its monthly bulletin, the European Central Bank (ECB) indicated that the inflation in the Euro-area would decline below 2% during 2013 and that region’s economy should start to gradually recover from recession later this year. However, it also added that risks to the economic outlook remain on the downside.
The greenback came under pressure, after the President of the Federal Reserve Bank of Atlanta, Dennis Lockhart, stated that he expects the central bank to continue with the large asset purchases well beyond mid 2013 in order to achieve sustained improvement in the labour market.
In the Asian session, at GMT0400, the pair is trading at 1.3386, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.3309, and a fall through could take it to the next support level of 1.3232. The pair is expected to find its first resistance at 1.3428, and a rise through could take it to the next resistance level of 1.3470.
Investors keenly eye the US Reuters/Michigan consumer sentiment index data due later today.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
