EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR marginally declined against the USD and closed at 1.3363, following disappointing economic data from the Eurozone, with both Germany and France reporting worse than expected GDP growth. The German GDP shrank by 0.2% (Q-o-Q) in the second of 2014, more than market estimates of 0.1% decline, registering its first decline since the first quarter of 2013. The French GDP remained flat, on a quarterly basis, for the second straight time in Q2, against consensus estimates of a 0.1% growth. Additionally, the economic growth in the Eurozone unexpectedly stagnated in Q2 2014, on a quarterly basis, compared to a rise of 0.2% in the previous quarter. Market expectations were for a rise of 0.1%.
Moreover, consumer prices in the Euro-region registered a fall of 0.7% in July, higher than market expectations of a drop of 0.6%, raising fears of growing deflationary threats in the region. Elsewhere, the French non-farm payrolls rose 0.1% in Q2.
Elsewhere, the ECB, in its August report, stated that growth in the Eurozone would remain weaker than previously expected as the region’s two biggest economies reported a worse than expected GDP data. It also cautioned that geopolitical tensions in Eastern Europe and weakness in emerging economies could pose a substantial risk to the bloc’s recovery.
Meanwhile, in the US, initial jobless claims rose more than expected, hitting the highest level since June and diminished the optimism over the strength of the labour market. The initial jobless claims climbed to 311,000, an increase of 21,000 from last week’s revised level of 290,000, in the week ended 9 August 2014. Additionally, continuing jobless claims in the US, for the week ended August 2, rose to 2.544 million, against market expectations of a fall to 2.500 million
In the Asian session, at GMT0300, the pair is trading at 1.3361, with the EUR trading tad lower from yesterday’s close.
The pair is expected to find support at 1.3337, and a fall through could take it to the next support level of 1.3312. The pair is expected to find its first resistance at 1.3397, and a rise through could take it to the next resistance level of 1.3432.
Investors are expected to keenly await industrial production as well as consumer sentiment data from the US, scheduled ahead in the day.
The currency pair is trading slightly below with its 20 Hr and 50 Hr moving averages.
