EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.48% against the USD and closed at 1.1186.
Macroeconomic data showed that manufacturing PMI recorded an unexpected rise to a level of 57.0 in May in the Eurozone, against market expectations for the index to drop to 56.5, following a reading of 56.7 in the previous month. However, the services activity in the region eased to a two-month low of 56.2 from 56.4 reported in April, compared to expectations for an unchanged reading.
Elsewhere, in Germany, the region’s powerhouse economy, the seasonally adjusted final gross domestic product (GDP) rose 0.6% on a quarterly basis in 1Q 2017, in line with market expectations. The preliminary figures had also indicated a rise of 0.6%, following an advance of 0.4% in the prior quarter.
Moreover, the manufacturing PMI in Germany unexpectedly rose to 59.4 in May, compared to a reading of 58.2 in the last month. Markets were anticipating manufacturing PMI to decline to a level of 58.0. Additionally, the nation’s services activity unexpectedly slid to a level of 55.2 in May, from a reading of 55.4 reported in the previous month. Market anticipation was for services PMI to climb to a level of 55.5.
In other news, the German Ifo business climate index reached to a level of 114.6 in May from a revised prior reading of 113.0. Investors were expecting the index to climb to 113.1. Also, the Ifo current assessment index in the nation advanced unexpectedly to a level of 123.2 in the same month, compared to market expectations of a fall to a level of 121.0, after a revised reading of 121.4 in the previous month.
The greenback traded higher against its peers, after the nation’s services PMI climbed to a four-month high in May with a reading of 54.0, which was above market forecasts of 53.2. In the prior month, the index had reported a level of 53.1. On the other hand, Markit flash manufacturing PMI surprisingly declined to 52.5 in May from 52.8 recorded in April, slipping to its lowest level in eight months. Markets were expecting the index to rise to 53.0.
Separately, sales of newly constructed homes fell 11.4% on a monthly basis in April to a seasonally adjusted annual rate of 569.0k, which was below analysts’ estimates of a drop to 610.0k. In the previous month, news home sales had posted a reading of 642.0k.
In the Asian session, at GMT0300, the pair is trading at 1.1183, with the EUR trading a tad lower against the USD from yesterday’s close.
The pair is expected to find support at 1.1149, and a fall through could take it to the next support level of 1.1116. The pair is expected to find its first resistance at 1.1242, and a rise through could take it to the next resistance level of 1.1302.
Going forward, investors will await a speech by the ECB President, Mario Draghi, scheduled later in the day, to get his insights into the Eurozone economy. Also, in the US, the FOMC meeting minutes along with weekly mortgage applications and existing home sales data for April, all due to release today, will garner a lot of market attention.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
