EURUSD Movement
On Friday, EUR declined 0.20% against the USD and closed at 1.3061, after the Fitch rating agency lowered its credit rating on France to ‘AA+’ from ‘AAA’, following the nation’s uncertain economic outlook amid the ongoing Euro-zone crisis and the need for structural reform. Moreover, disappointing European industrial output data also pressured the single currency. The seasonally adjusted industrial production in the Euro-zone dropped 0.3% (MoM) in May, compared to a revised rise of 0.5% recorded in the previous month.
In other developments, the Finance Ministry of Portugal indicated that the Troika has agreed to delay its quarterly evaluation of a €78.0 billion bailout program to late August 2013.
Meanwhile in the US, the producer price index advanced 0.8% (MoM) in June, the biggest increase since last September, whereas the preliminary consumer sentiment index slipped to a reading of 83.9 for July.
Separately, the Philadelphia Fed President, Charles Plosser stated that the US central bank should begin tapering its $85 billion in monthly bond buying in September and end the monetary stimulus program by the end of this year. Elsewhere, St. Louis Fed President, James Bullard opposed the tapering of QE until inflation accelerates toward its 2% target.
In the Asian session, at GMT0300, the pair is trading at 1.3068, with the EUR trading marginally higher from Friday’s close.
The pair is expected to find support at 1.3013, and a fall through could take it to the next support level of 1.2957. The pair is expected to find its first resistance at 1.3109, and a rise through could take it to the next resistance level of 1.3149.
In the absence of any major economic news from the Euro-zone, investors shall eye the US retail sales data which is expected to register a rise in June.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
