EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.63% against the USD and closed at 1.14398, amid dismal economic data.
In the economic news, the Eurozone’s flash manufacturing PMI slid to a 26-month low level of 52.1 in October, more than market expectations for a fall to a level of 53.0 in October. In the previous month, the PMI had registered a level of 53.2. Moreover, the region’s the flash services PMI eased to its lowest level in two-years to 53.3 in October, led by a slowdown in exports. Market participants had expected for a drop to a level of 54.5. In the previous month, the PMI had recorded a reading of 54.7.
Furthermore, in Germany, the preliminary Markit manufacturing PMI fell to a level of 52.3 in October, marking its lowest level in 29-months and compared to a level of 53.7 in the previous month. Market participants had anticipated the PMI to ease to a level of 53.4. Additionally, the nation’s flash services PMI dropped to a five-month low level of 53.6 in October, more than market forecast for a fall to a level of 55.5. In the prior month, the PMI had registered a level of 55.9.
In the Asian session, at GMT0300, the pair is trading at 1.1411, with the EUR trading 0.11% higher against the USD from yesterday’s close.
In the US, data indicated that US flash Markit manufacturing PMI unexpectedly advanced to a five-month high level of 55.9 in October, compared to a level of 55.6 in the prior month. Market participants had anticipated the PMI to decline to a level of 55.3. Also, the preliminary Markit services PMI hit a two-month high level of 54.7 in October, compared to a level of 53.5 in the prior month. Markets had envisaged for the PMI to climb to a level of 54.0.
Other data showed that US housing price index climbed 0.3% on a monthly basis in August, compared to a revised advance of 0.4% in the previous month. Market participants had expected the index to rise 0.3%. Further, the nation’s MBA mortgage applications rebounded 4.9% in the week ended 19 October 2018, following a drop of 7.1% in the previous week.
On the contrary, new home sales unexpectedly eased 5.5% on a monthly basis to a level of 553.00 K in September, declining for the fourth consecutive month and hitting its lowest level in two-years, due to rising mortgage rates. In the preceding month, new home sales had recorded a revised level of 585.0K, while markets had anticipated for a gain of 625.0K.
Separately, the Federal Reserve’s latest Beige Book revealed that the US economic activity expanded at a “modest to moderate” pace, despite continuous uncertainties over trade and labour shortages. Meanwhile, the officials expressed worries over rising tariffs affecting the US companies and resultant price increases. Further, the policymakers hinted at one more interest-rate hike this year.
The pair is expected to find support at 1.1368, and a fall through could take it to the next support level of 1.1324. The pair is expected to find its first resistance at 1.1466, and a rise through could take it to the next resistance level of 1.1520.
Looking ahead, investors would closely monitor the European Central Bank’s (ECB) interest rate decision for October, due to be released later in the day. Also, Germany’s GfK consumer confidence for November, IFO business climate, business expectations and current assessment all for October, set to release in a while, will garner significant amount of investors’ attention Later in the day, the US initial jobless claims followed by advance goods trade balance, retail inventories, pending home sales and durable goods orders, all for September, will keep traders on their toes.
The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.
