EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.20% against the USD and closed at 1.3597, as the latest batch of lacklustre economic releases from the Euro-zone and its member nations fuelled concerns on the recovery of the region and strengthened speculations for an interest-rate cut by the ECB at its June policy meeting. Data showed that Euro-zone’s Markit manufacturing PMI fell more-than-expected to a six-month low reading of 52.2 in May as manufacturing activities in Germany, France and Italy decreased last month. Negative sentiment for the Euro-zone’s common currency was also fuelled after annual inflation rate in Germany, the largest economy in the Euro-zone, fell to 0.9% in May, the weakest level since June 2010. Separately, an ECB Executive Board member, Yves Mersch highlighted the importance of structural reform in the Euro-zone to stimulate economic growth in the region.
On the other hand, the US Dollar gained ground after the ISM corrected its initial data and reported that activities in the US manufacturing sector rose at the fastest pace of 2014 in May, while Markit Economics reported that its manufacturing PMI in the US rose to a three-month high reading of 56.4 last month.
Meanwhile, at a conference in Istanbul, the Chicago Fed President, Charles Evans, hinted that any interest rate hike in the US would mainly depend on inflation expectations. Furthermore, he cautioned that if consumer prices in the world’s largest economy remain below the Fed’s 2.0% target, an interest rate hike could be delayed to next year or even 2016.
In the Asian session, at GMT0300, the pair is trading at 1.3603, with the EUR trading slightly higher from yesterday’s close.
The pair is expected to find support at 1.3581, and a fall through could take it to the next support level of 1.3559. The pair is expected to find its first resistance at 1.3631, and a rise through could take it to the next resistance level of 1.3659.
Traders keenly await Euro-zone’s consumer inflation and unemployment rate data for further cues in the Euro.
The currency pair is showing convergence with its 20 Hr moving average and is trading below its 50 Hr moving average.
