EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined marginally against the USD and closed at 1.1184.
In economic news, Italy’s consumer confidence index dropped to a level of 109.2 in August, from a revised reading of 111.2 in the previous month. Additionally, the nation’s business confidence index declined to a level of 101.1 in August, its lowest since February 2015, compared to a revised reading of 102.9 in the previous month.
On Friday, data showed that Germany’s consumer confidence index unexpectedly advanced to a fifteen-month high level of 10.2 in September, indicating that concerns over uncertainty created by the historic Brexit vote has faded. Markets expected it to remain steady at a level of 10.0.
In the US, personal income rose by 0.4% on a monthly basis in July, in line with market expectations. Personal income had registered a revised rise of 0.3% in the previous month. Further, personal spending advanced for a fourth straight month, after it increased by 0.3% MoM in July, amid strong demand for automobiles, at par with market consensus and following a revised rise of 0.5% in the prior month. Further, the nation’s core personal consumption expenditure inched up 0.1% last month, after registering a similar increase in June.
On Friday, in a speech at the annual economic symposium in Jackson Hole, the Federal Reserve (Fed) Chairwoman, Janet Yellen, stated that the possibility to hike interest rate has intensified, as recent economic data indicated that the US economy is strong enough to withstand a rate hike in the near-term. Further, she noted that the economy is expanding at a moderate pace and is “nearing” the central bank’s goals of full employment and stable prices. Moreover, Fed’s Vice Chairman, Stanley Fischer, expressed confidence over the health of the nation’s economy as the labour market was showing signs of continuous growth and stated that next jobs report will be a key factor to decide on the future path of interest rate hikes.
In other economic news released Friday, the second estimate of annualised GDP indicated that economic growth in the US was revised down to 1.1% in second quarter of 2016, at par with market expectations and following a reading of 1.2% in the prior month. Additionally, the nation’s advance goods trade deficit narrowed more-than-expected to a level of 59.3 billion in July, compared to investor consensus for it to narrow to a level of 63.0 billion and after recording a deficit of 64.5 billion in the preceding month. On the contrary, the nation’s final Reuters/Michigan consumer sentiment index surprisingly dropped to a level of 89.8 in August, compared to a preliminary recording of 90.4.
In the Asian session, at GMT0300, the pair is trading at 1.1167, with the EUR trading 0.15% lower against the USD from yesterday’s close.
The pair is expected to find support at 1.1146, and a fall through could take it to the next support level of 1.1126. The pair is expected to find its first resistance at 1.1197, and a rise through could take it to the next resistance level of 1.1228.
Going ahead, market participants would look forward to the Euro-zone’s consumer confidence data for August, slated to release in a few hours. Moreover, the US consumer confidence for August, due later in the day, will attract significant amount of market attention.
The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.
