EURUSD Movement
On Friday, EUR rose 0.22% against the USD and closed at 1.3517, after the data indicated that economic confidence in the Euro-zone reached a two-year high in September after rising for five consecutive months. Meanwhile, the US Dollar gave up ground as lingering concern over the US budget talks spooked investors confidence. Also, the greenback came under further pressure, after two key Fed policymakers’ eased concerns over central bank’s pace of stimulus measures.
The New York Fed President, William Dudley, indicated that the economic recovery still needs support. He added that the domestic labour market is not yet healthy and inflation should firm in the months ahead. The Chicago Fed Chief, Charles Evans echoed similar views, as he stated that there is a chance that the Fed might not move to scale back its bond-buying program until early 2014.
In the Euro-zone, an official report showed that the region’s economic sentiment indicator rose to a level of 96.9 in September, more than analysts’ expectation for a rise to 96.0 and compared to a reading of 95.2 registered in the previous month. However, Euro-zone’s consumer confidence remained unchanged at a reading of -14.9, defying market expectation for an improvement to a -14.5 level. Separately, another official report revealed that the German consumer price index stood at 1.4% (YoY) in September, below market estimate for a rise to 1.5%, similar to previous month’s gain.
Elsewhere in the US, data showed that the nation’s Reuters/Michigan consumer sentiment index declined to a reading of 77.5 in September, more than analysts’ call for a fall to 78.0 and compared to a level of 82.1 registered in the preceding month. Another report showed that personal spending and personal income in the nation rose 0.3% and 0.4% respectively, in line with market expectation and following a 0.2% and 0.1% rise registered in the earlier month.
In the Asian session, at GMT0300, the pair is trading at 1.3504, with the EUR trading 0.10% lower from Friday’s close.
The pair is expected to find support at 1.3466, and a fall through could take it to the next support level of 1.3429. The pair is expected to find its first resistance at 1.3553, and a rise through could take it to the next resistance level of 1.3603.
Ahead today, investors await the release of Euro-zone’s consumer inflation data for September.
The currency pair is trading below its 20 Hr moving average and is showing convergence with its 50 Hr moving average.
