EURUSD Movement
On Friday, for the 24 hours to 23:00 GMT, EUR rose 1.68% against the USD and closed at 1.2381, amid increased risk appetite among investors, following positive service sector data from the Euro-zone and stronger-than-expected US jobs data.
In the Euro-zone, service Purchasing Managers’ Index (PMI) improved to a reading of 47.9 in July, higher than the flash estimate for a reading of 47.6. Separately, retail sales climbed 0.1% (MoM) in June, compared to a revised 0.8% rise in the previous month.
In Germany, service PMI increased unexpectedly to 50.3 in July, against the flash estimates for a decline to 49.7 and compared to a reading of 49.9 in June. Moreover, French service PMI rose to a reading of 50.0 in July. However, in Italy, the services PMI declined unexpectedly to a reading of 43.0 in July.
Over the weekend, German Foreign Minister, Guido Westerwelle, warned that Europe should not rely too heavily on Germany to fix the Euro-zone crisis, and further added that coping with the debt crisis was a “shared task” and that “everyone must pull together to find a solution”.
Meanwhile, Italian Prime Minister, Mario Monti, has voiced fears that tension sparked by the Euro-zone crisis have already turned countries against each other and must not be allowed to rip Europe apart adding that Italy needs moral support from Germany and not its cash.
Moreover, Italy’s central bank Chief, Ignazio Visco, stated that there is no need “at the moment” to request help from European funds to fight soaring borrowing costs.
Additionally, Greece held talks with its international lenders (EU, IMF and ECB) on further spending cuts it must adopt to secure a new €31.5 billion aid that is vital to keep the country afloat, aiding trading sentiment towards the Euro.
In the Asian session, at GMT0300, the pair is trading at 1.2396, with the EUR trading 0.12% higher from Friday’s close.
The pair is expected to find support at 1.2229, and a fall through could take it to the next support level of 1.2063. The pair is expected to find its first resistance at 1.2503, and a rise through could take it to the next resistance level of 1.2611.
Trading trends in the pair today are expected to be determined by the release of Sentix investor confidence in the Euro-zone.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
