EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose marginally against the USD and closed at 1.3314, after the release of encouraging economic sentiment data from Germany and the Euro-zone.
The Euro remained buoyant as the European Union Economic and Monetary Affairs Commissioner, Olli Rehn stated that the EU finance ministers and the Commission are confident that Ireland and Portugal would be able to return to full market financing after their bailouts and will work in the coming months to facilitate that.
Earlier, Spanish Treasury sold €2.8 billion of three-month bills at an average yield of 0.441%, compared to 1.195% in the previous month, supporting gains in the Euro.
On the economic front, Euro zone’s ZEW economic sentiment index advanced to a reading of 31.2 in January, from a reading of 7.6 in the previous month, while in Germany, the ZEW economic sentiment index jumped to 31.5 in January, reaching the highest level since May 2010, compared to a reading of 6.9 in the previous month. Similarly, the German ZEW current sentiment index rose to 7.1 in January, above the forecasts for a reading of 6.0 and from a reading 5.7 in December.
During the US trading session, the Euro held steady against the US Dollar, after disappointing US home sales data. The National Association of Realtors (NAR) reported that, the seasonally adjusted existing home sales fell 1.0% (MoM) to an annual rate of 4.94 million in December, compared to downwardly revised sales of 4.99 million houses recorded in the previous month. Also, the Federal Reserve Bank of Richmond reported that, on a seasonally adjusted basis, its manufacturing index in the region fell to a reading of -12.0 in January.
The Euro added to gains, after Mario Draghi, the President of the European Central Bank (ECB), indicated that the ECB has taken necessary steps to bring a recovery in the Euro-area and now the onus falls on governments to carry the reforms forward.
In the Asian session, at GMT0400, the pair is trading at 1.3311, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.3261, and a fall through could take it to the next support level of 1.3212. The pair is expected to find its first resistance at 1.3366, and a rise through could take it to the next resistance level of 1.3422.
In the Euro-zone, investors eye the consumer confidence data due later today, while in the US the housing price index and MBA mortgage applications are awaited.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
