EURUSD Movement
On Friday, EUR declined 0.10% against the USD and closed at 1.3536. However, the Euro-zone’s shared currency received some support after ECB’s Benoit Coeur rubbished speculations for an immediate QE measures in the European economy by stating that QE “is not needed now, because policymakers do not see deflation in the Euro-zone.” Furthermore, he indicated that, currently, the ECB would assess the impact of its last week’s policy actions while hinting that the central bank “would be ready to act if its actions last week would not be effective in pushing inflation back” to the central bank’s target. Separately, an ex-ECB official, Juergen Stark, opined that threats over low inflation in the Euro-zone were irrational as, according to him, prices in the Euro-bloc remained stable.
In economic news, employment in the Euro-zone economy rose 0.1% (QoQ) for the second consecutive quarter in the first three months of 2014 while seasonally adjusted trade surplus in the region widened to €15.8 billion in April. Separately, data from Euro-zone’s member nations showed that, German consumer prices fell to its lowest annual reading since 2010 in May while consumer price index in Italy and Spain rose in-line with market expectations last month.
Meanwhile, in the US, producer price index unexpectedly fell 0.2% (MoM) in May while the Thomson Reuters/ University of Michigan index of US consumer sentiment declined to a three-month low level at 81.2 in June.
In the Asian session, at GMT0300, the pair is trading at 1.3540, with the EUR trading marginally higher from Friday’s close.
Earlier today, an ECB Governing Council member, Ewald Nowotny, during his interview with Sueddeutsche Zeitung newspaper, played down speculations for the ECB engaging itself in direct purchases of state debt to help boost the Euro-zone economy while hinting that the central bank’s stress tests on major European banks could end up being too tough.
The pair is expected to find support at 1.3513, and a fall through could take it to the next support level of 1.3487. The pair is expected to find its first resistance at 1.3573, and a rise through could take it to the next resistance level of 1.3607.
Traders keenly await the release of Euro-zone’s consumer inflation data for further cues in the Euro.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
