EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.05% against the USD and closed at 1.2918, amid speculation that Spain is moving closer to request sovereign bail out.
In Spain, the Catalonia’s President, Artur Mas, stated a sovereign bailout for Spain is unavoidable, and Madrid should ask for it without a long delay.
However, Finnish Prime Minister, Jyrki Katainen, cited that he felt it unlikely Spain would request a full sovereign bailout because the nation has an interest in keeping access to the markets open and Europe should help it do that.
Adding to the positive side, the Greek Finance Minister, Yannis Stournaras, stated that the nation expects to bridge a fiscal gap with international creditors by Monday to unblock access to second bailout fund. However he acknowledged that the difference with creditors was still “quite big”.
In Euro-zone, retail sales dropped 1.3% (YoY) in August, compared to 1.4% fall in July. Additionally, the Markit services Purchasing Managers’ Index (PMI) declined to 46.1 in September from 47.2 in August, while composite PMI declined to 46.1 in September. The German services PMI rose to 49.7 in September, while French service PMI fell to 45.0 in September. Additionally, Spanish and Italian PMI remained in contraction territory in September.
Meanwhile, the International Monetary Fund (IMF) head, Christine Lagarde, urged Euro-zone leaders to move fast to resolve the bloc’s debt crisis adding that the cost of solution increases as time passes.
In the Asian session, at GMT0300, the pair is trading at 1.2926, with the EUR trading 0.06% higher from yesterday’s close.
The pair is expected to find support at 1.2890, and a fall through could take it to the next support level of 1.2854. The pair is expected to find its first resistance at 1.2950, and a rise through could take it to the next resistance level of 1.2973.
In the day ahead, investors are awaiting the European Central Bank (ECB) rate decision, which is expected to remain unchanged at 0.75%. Additionally, investors are also eyeing developments in Spain.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
