EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.21% against the USD and closed at 1.1229.
In economic news, Euro-zone’ s final services PMI unexpectedly rose to a level of 52.9 in May, compared to a reading of 52.8 in the previous month. Market participants and preliminary figures had anticipated the PMI to drop to a level of 52.5. Moreover, the region’s producer price index (PPI) climbed 2.6% on an annual basis in April, compared to a gain of 2.9% in the previous month. Markets had envisaged the PPI to record a rise of 3.1%. Also, the nation’s seasonally adjusted retail sales jumped 1.5% on an annual basis in April, in line with market expectations and following a revised rise of 2.0% in the prior month.
The US dollar gained ground against major currencies, on the back of Fed’s optimistic Beige Book report.
The Fed’s Beige Book indicated that the US economy slightly improved expanding at “a modest pace overall” from April to mid-May. On the inflation front, the Beige Book reported that overall prices continued to increase at a modest pace in most districts. Further, the report showed that economic outlook for the coming months remained “solidly positive but modest, with little variation among reporting districts.” However, the report highlighted concerns over trade conflict between the US and its trade partners.
Separately, in the US, data showed that the ISM non-manufacturing PMI unexpectedly rose to a level of 56.9 in May, compared to a reading of 55.5 in the prior month. Market participants had anticipated the PMI to register a fall to a level of 55.4. Furthermore, the nation’s ADP private sector employment growth slowed to 9-year low level of 27.0K in May, following a revised level of 271.0K in the prior month. Also, the nation’s MBA mortgage applications climbed 1.5% on a weekly basis in the week ended 31 May 2019, following a fall of 3.3% in the preceding month.
On the contrary, the US final Markit services PMI declined to a level of 50.9 in May, in line with market expectations and confirming the preliminary figures. In the prior month, the PMI had registered a level of 53.0.
In the Asian session, at GMT0300, the pair is trading at 1.1227, with the EUR trading a tad lower against the USD from yesterday’s close.
The pair is expected to find support at 1.1196, and a fall through could take it to the next support level of 1.1165. The pair is expected to find its first resistance at 1.1282, and a rise through could take it to the next resistance level of 1.1337.
Looking ahead, traders would closely monitor the European Central Bank’s interest rate decision along with the Euro-zone’s gross domestic product for the first quarter followed by Germany’s factory orders for April and the Markit construction PMI for May, slated to release in few hours. Later in the day, the US trade balance data for April and initial jobless claims, will keep traders on their toes.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
