EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.21% against the USD and closed at 1.2604, as speculation over a fresh round of easing by global central banks weighed on the US Dollar ahead of monetary policy meetings later in the week.
The US dollar fell amid mounting speculation that the Federal Reserve could implement a third round of quantitative easing (QE3) to shore up growth. On the other hand, speculation grew amongst investors that the European Central Bank would reduce rates by 25 basis points to 0.75% at its policy meeting tomorrow.
On the economic front, Euro-zone producer price index fell 0.5% (MoM) in June, compared to a rise of 0.1% in May. Moreover, unemployment rate in Spain declined 2.1% (MoM) in June, marking the decline for third consecutive month.
In a bond auction, EFSF sold €1.91 billion of 91-day bills with a yield of 0.1184%, compared with 0.137% in June.
In the Asian session, at GMT0300, the pair is trading at 1.2589, with the EUR trading 0.12% lower from yesterday’s close.
The pair is expected to find support at 1.2556, and a fall through could take it to the next support level of 1.2523. The pair is expected to find its first resistance at 1.2625, and a rise through could take it to the next resistance level of 1.2661.
Trading trends in the pair today are expected to be determined by the release of Euro-Zone service purchasing manager index (PMI) and retail sales data.
The currency pair is converging its 20 Hr and 50 Hr moving averages.
