EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.94% against the USD and closed at 1.2570, after European Central Bank (ECB) President, Mario Draghi stated the ECB stands ready to act if the economy slips lower.
Yesterday, ECB kept the benchmark interest rate at a record low of 1.0% in June, in line with the market expectations.
Speaking at the ECB’s post policy meeting press conference, Mario Draghi stated that there were downside risks to the European economy, stemming from the debt crisis in the region and its growing potential to spill over to the wider economy. However, he added that the central bank stands ready to help support the economy should things deteriorate in the Euro-zone.
Also helping sentiment, ECB Governing Council member, Ewald Nowotny, stated that any Spanish request to tap European bailout funds would be a “reasonable option” to restore trust in the country’s banking sector.
In economic news, the gross domestic product in the Euro-zone remained unchanged in the first quarter of 2012, in line with the market expectation. Separately, industrial production in Germany fell 2.2% (MoM) in April, against the market expectation of 1.0% contraction, and compared to a rise of 2.2% in March. Additionally, in Spain, industrial production dropped 8.3% (YoY) in April, making it the biggest contraction since October 2009.
Meanwhile, Germany’s Treasury sold €3.978 billion in five-year government bonds maturing in September 2017, at an average yield of 0.41%, the lowest yield on record and down from 0.56% at a similar auction last month.
In the Asian session, at GMT0300, the pair is trading at 1.2566, with the EUR trading 0.03% lower from yesterday’s close.
The pair is expected to find support at 1.2477, and a fall through could take it to the next support level of 1.2387. The pair is expected to find its first resistance at 1.2621, and a rise through could take it to the next resistance level of 1.2675.Trading trends in the pair today are expected to be determined by the release of ILO unemployment rate in France.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
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