EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR surged 3.03% against the USD and closed at 1.0930, after the ECB’s decision did not match traders’ expectations for stimulus measures.
The ECB slashed its deposit rate further into negative territory by 10 basis points to a fresh low of -0.3%, down from -0.2%. It also revised lower its 2016 inflation forecast to 1.0% from 1.1%, while the 2017 outlook slipped to 1.6% from 1.7%. At the press conference that followed, ECB, President Mario Draghi, announced that the central bank would extend its massive €60.0 billion a month bond-buying scheme to at least March 2017 in an effort to achieve its desired inflation level and boost lacklustre growth in the Euro-zone.
In economic news, Euro-zone’s final Markit services PMI advanced less-than-anticipated to a level of 54.2 in November, compared to market expectations of an advance to a level of 54.6. The preliminary figures had recorded an advance to 54.60. In the previous month, it had recorded a level of 54.1. At the same time, the German final services activity index expanded to a level of 55.6 in November, increasing at its fastest pace in 14 months, compared to a reading of 54.5 in the previous month. The preliminary figures had also indicated an advance to 55.6.
The greenback lost ground after data indicated that the US services PMI missed estimates. The US ISM non-manufacturing PMI index registered a drop to 55.9 in November, compared to market expectations of a drop to a level of 58.0, and after registering a reading of 59.1 in the previous month. Additionally, the nation’s final Markit services PMI index advanced less-than-expected to a level of 56.1 in November, compared to a reading of 54.8 in the prior month. The preliminary figures had indicated an advance to 56.5. Also, the US initial jobless claims increased to a level of 269.0K in the week ended 28 November 2015, from a reading of 260.0K in the previous week.
In the Asian session, at GMT0300, the pair is trading at 1.093, with the EUR trading flat from yesterday’s close.
The pair is expected to find support at 1.0642, and a fall through could take it to the next support level of 1.0353. The pair is expected to find its first resistance at 1.1100, and a rise through could take it to the next resistance level of 1.1271.
Going ahead, investors will await the Euro-zone’s Q3 GDP data, along with Germany’s CPI and industrial production data, all scheduled to be released next week.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
