EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.38% against the USD and closed at 1.2757, after the European Commission downgraded its 2013 growth forecast for the 17-nation economy to just 0.1% from the 1.0% projected earlier this year. Further, EU forecasted that the Euro-zone economy would shrink 0.4% in 2012, slightly worse than the 0.3% contraction forecasted earlier.
Additionally, the ECB President, Mario Draghi stated that the economic situation in the 17-nation Euro-zone is currently weak and would remain so for the time being.
Meanwhile in economic news, retail sales in the Euro-zone declined 0.8% (YoY) in September, from a 0.9% drop in August. Separately, on a working day adjusted basis, Spanish industrial production declined 7.0% (YoY) in September, compared to a revised 2.5% drop in August.
Additionally, industrial production in Germany fell 1.8% (MoM) in September, following a revised 0.4% drop in August. Moreover, the purchasing managers’ index for the construction sector in Germany dropped to a reading of 44.6 in October, marking its lowest reading since July 2012.
Late yesterday, Greek Prime Minister, Antonis Samaras, received the support of enough lawmakers to secure approval of austerity measures needed to receive €31.0 billion of the next tranche of financial aid, after more than 50,000 protesters demonstrated outside Greek Parliament.
In the Asian session, at GMT0400, the pair is trading at 1.2751, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.2699, and a fall through could take it to the next support level of 1.2648. The pair is expected to find its first resistance at 1.2839, and a rise through could take it to the next resistance level of 1.2928.
Trading trends in the pair today are expected to be determined by the release of trade balance data in Germany and France. Investors also keenly eye the ECB interest rate decision data later today. In the US, initial jobless claims and the trade balance is likely to receive increased market attention.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
