EURUSD Movement
For the 24 hours to 23:00 GMT, EUR fell marginally against the USD and closed at 1.3310. Trading remained subdued as US market remained closed yesterday for the Martin Luther King, Jr. holiday.
Yesterday, Jens Weidmann, the President of Bundesbank, stated that policymakers should take decisive steps this year to possibly put an end to the Euro-zone debt crisis. He also warned that pressurising central banks to pursue aggressive monetary policies could lead to competitive exchange rate devaluations.
In its monthly report, the Bundesbank stated that Germany’s economic slowdown is likely to be short-lived as the biggest Euro-area economy’s prospects have improved at the beginning of the year. Meanwhile, the European Bank for Reconstruction and Development (EBRD) slashed Central and South Eastern European countries growth outlook and indicated that the region would record stronger growth in 2013, but at a slower rate than estimated earlier.
Yesterday, the Euro-area finance ministers blessed the next disbursement of emergency aid for Greece, highlighting greater European political confidence in the ability of the government in Athens to press ahead with budget cuts Meanwhile, Ireland and Portugal requested Euro-zone finance ministers to extend the repayment of part of their bailout aid.
In a noteworthy development, Dutch Finance Minister, Jeroen Dijsselbloem has replaced Jean-Claude Juncker as the new head of the Eurogroup finance ministers.
In the Euro-zone economic news, Germany’s producer price index fell 0.3% (MoM) in December, compared to a 0.1% drop in the previous month.
In the Asian session, at GMT0400, the pair is trading at 1.3344, with the EUR trading 0.26% 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 1.3273. The pair is expected to find its first resistance at 1.3370, and a rise through could take it to the next resistance level of 1.3395.
ECB President Mario Draghi’s speech is keenly eyed by investors, while Germany’s ZEW survey – current situation and economic sentiment data are also awaited. In the US, existing home sales change and Richmond Fed manufacturing index data are due later today.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
