EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 0.07% against the USD and closed at 1.0924.
On the macro front, Euro-zone’s ZEW survey economic sentiment index climbed to 46.0 in May, compared to a level of 25.2 in the previous month. On the other hand, seasonally adjusted construction output dropped 14.2% on a monthly basis in March, compared to a revised drop of 0.5% in the prior month. Separately, Germany’s ZEW survey economic sentiment rose to 51.0 in May, more than market expectations for a rise to a level of 32.0 and compared to a reading of 28.2 in the previous month. Meanwhile, the ZEW survey current situation unexpectedly fell to
-93.5 in May, defying market expectations for a rise to a level of -88.0 and compared to a reading of -91.5 in the earlier month.
In the US, building permits slumped 20.8% to an annual rate of 1.07 million on a monthly basis in April, less than market forecast and compared to a revised reading of 1.36 million in the previous month. Additionally, housing starts plunged 30.2% to an annual rate of 0.89 million on a monthly basis in April, compared to a reading of 1.28 million in the prior month.
US Federal Reserve Chairman, Jerome Powell and US Treasury Secretary, Steven Mnuchin in their testimony before the Senate Banking, Housing and Urban Affairs Committee, highlighted a grim picture of the economic damage caused by the coronavirus pandemic and warned of more severe job losses in the coming months. But they offered contrasting views of how best to boost the economy, with Mr. Powell suggesting that more fiscal support to states and businesses might be needed to avoid permanent economic damage and Mr. Mnuchin suggesting that without an expeditious reopening, the economy might never fully recover. Moreover, Mr. Powell cautioned that a full recovery will not come until the health crisis is resolved. Meanwhile, both of them supported the Fed’s USD2tn coronavirus relief package.
In the Asian session, at GMT0300, the pair is trading at 1.0938, with the EUR trading 0.13% higher against the USD from yesterday’s close.
The pair is expected to find support at 1.0901, and a fall through could take it to the next support level of 1.0865. The pair is expected to find its first resistance at 1.0975, and a rise through could take it to the next resistance level of 1.1013.
Moving ahead, traders would keep a watch on Euro-zone’s current account for March and the consumer price index for April, slated to release in a few hours. Later in the day, the US MBA mortgage applications followed by the FOMC minutes would keep investors on their toes.
The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
