EURUSD Movement
On Friday, EUR declined 0.56% against the USD and closed at 1.2613, extending its previous session losses.
On the macro front, manufacturing production in France unexpectedly registered a drop of 0.2% on a monthly basis in August, compared to a revised drop of 0.1% in July, while industrial production remained flat on a monthly basis in August.
Separately, the ECB Executive Board member, Peter Praet stated that the Euro-zone would post a modest recovery in the third quarter of 2014. However, he urged policymakers to be extra vigilant with respect to the volatility surrounding inflation expectations in the region.
Over the weekend, the ECB Chief, Mario Draghi indicated that he sees no major risks in Euro-zone government bond markets, and does not expect instability to impede possible sovereign bond purchases by the ECB. He further stated that the central bank was ready to take further steps if required to bring annual inflation closer to its 2% target.
In the US, the export price index recorded a drop of 0.2% on a monthly basis in September, higher than market expectations for a fall of 0.1%, while import price index eased 0.5% on a monthly basis in the same month.
The Philadelphia Fed President, Charles Plosser stated that he is not too concerned about the nation’s current inflation levels and reiterated that any decision on interest rates should be data- driven not date-driven. Separately, the Kansas City Fed President, Esther George indicated that the Fed would likely raise its interest rates next year and must do so only when there are evidences to show that the US economy is on firm footing.
Meanwhile, the Dallas fed President, Richard Fisher mentioned that the Fed should rethink its forward guidance and its pledge to keep interest rates near zero for a “considerable time” after it ends its bond-buying stimulus.
In the Asian session, at GMT0300, the pair is trading at 1.2694, with the EUR trading 0.64% higher from Friday’s close.
The pair is expected to find support at 1.2630, and a fall through could take it to the next support level of 1.2566. The pair is expected to find its first resistance at 1.2734, and a rise through could take it to the next resistance level of 1.2774.
Trading trends in the Euro today would be determined by Germany’s Wholesale Price Index data, scheduled in a few hours.
The currency pair is trading between its 20 Hr and 50 Hr moving averages.
