EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 0.59% against the USD and closed at 1.1283 on Friday.
On Friday, macroeconomic data showed that the producer price index (PPI) in the Euro-zone remained flat on a monthly basis In April, less than market expectations for a rise of 0.2%. In the prior month, the PPI had registered a drop of 0.3%. On the other hand, producer prices gained 4.3% year-over-year in April across the region, faster than the 3.9% rise in March. Analysts had expected a 4.5% increase for the month.
Meanwhile, Greece’s economy expanded by 0.4% in the first quarter of 2017 compared with the fourth quarter of last year, revising upwards a previous preliminary estimate provided in May that showed a 0.1% fall. Following the release of positive GDP growth data, the Greek government urged for a clear solution regarding the debt load issue at the upcoming EuroGroup meeting on 15 June.
The greenback traded lower against its counterparts following the release of the weaker than expected US jobs report. Non-farm payrolls in the nation rose less than expected by 138.0k in May, after climbing by a downwardly revised 174.0k jobs in the previous month, thus raising concerns about the health of the US economic growth and the pace of the Federal Reserve’s (Fed) plans to raise interest rates this year. Markets had anticipated an increase of 182.0k jobs. However, the nation’s unemployment rate dropped to 4.3%, its lowest level since 2001. Meanwhile, the US average earnings rose 2.5% in May from the previous year, which was below market expectations of 2.6% gain but matched the 2.5% rate in April.
Further, the US trade deficit widened more than expected to $47.6 billion in April, compared to a revised trade deficit of $45.3 billion in the previous month. Market anticipation was for the nation to post a trade deficit of $46.1 billion.
Moreover, Philadelphia Fed Bank President Patrick Harker reiterated his support for two more interest rate hikes this year, stating that the US inflation remains on track to meet the Fed’s 2.0% target. However, he commented that the biggest risk to the US economy is the uncertainty over Donald Trump’s economic policies.
In the Asian session, at GMT0300, the pair is trading at 1.1273, with the EUR trading 0.09% lower from Friday’s close.
The pair is expected to find support at 1.1224, and a fall through could take it to the next support level of 1.1174. The pair is expected to find its first resistance at 1.1304, and a rise through could take it to the next resistance level of 1.1334.
Going ahead, investors will focus on the Euro-zone’s final services and composite PMIs, both for May, scheduled to release later in the day. Moreover, the US ISM non-manufacturing PMI and Markit services PMI data, both for the month of May, along with durable goods orders and US factory orders data for April, will be closely watched by traders.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
