EURUSD Movement
For the 24 hours to 23:00 GMT, EUR marginally rose against the USD and closed at 1.3929.
The EUR initially lost ground after the economic sentiment data from the Euro-zone and Germany disappointed investors, fuelling concerns over the economic outlook of the region. The Centre for European Economic Research (ZEW) reported that the ZEW survey – economic sentiment index in Germany dropped to a seven-month low level of 46.6 in March and failed to match expectations of a 52.0 reading, compared to a level of 55.7 reported in the prior month. Additionally, the economic sentiment index in the Euro-zone too reported a decline to a level of 61.5 in March, missing market expectation of a level of 67.3 and compared to a reading of 68.5 reported in the previous month. Further, adding to the negative sentiment, Euro-zone trade surplus narrowed to €0.9 billion in January, from a revised surplus of €13.8 billion recorded in the previous month.
Later in the day, the common currency also came under pressure after reports emerged that Russian troops had attacked a Ukrainian army installation near Simferopol. However, the losses were reversed after the Russian President Vladimir Putin assured no further split of Ukraine after the Crimea referendum.
The US Dollar found some support after data revealed that the number of building permits issued in the US rose more than expected to a four month high to a seasonally adjusted 1018K in February, surpassing January’s figure of 945K. However, gains were checked after the US housing starts dropped for a third consecutive month at a 0.2% annualized rate to 0.907 million last month, following a revised 0.909 million pace in the previous month. Separately, official data indicated that the consumer prices in the US rose 0.1% in February, in line with analysts’ projections and matching January’s advance.
Meanwhile, the US Department of the Treasury reported net treasury international capital (TIC) long term inflows of $7.3 billion in January, compared to outflows of $45.9 billion reported in the previous month.
In the Asian session, at GMT0400, the pair is trading at 1.3923, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.3887, and a fall through could take it to the next support level of 1.3850. The pair is expected to find its first resistance at 1.3952, and a rise through could take it to the next resistance level of 1.3980.
Later today, all eyes would be on the release of the latest Federal Reserve policy meeting and interest rate decision, wherein investors would be keen to know whether the Fed would announce a further tapering of its quantitative easing programme.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
