EURUSD Movement
For the 24 hours to 23:00 GMT, EUR declined 0.32% against the USD and closed at 1.3472, as investors’ risk appetite declined after the European Commission stated that it is too early to declare a victory in the Euro-zone’s fight against recession. Additionally, it slashed its growth forecast on the Euro-zone economy for 2014 from 1.2% to 1.1% and indicated that unemployment in the region would remain unchanged at a record 12.2%. However, for 2015, the commission forecasted the region’s unemployment to drop to 11.8% and growth to accelerate to 1.7%.
Separately, the European Central Bank (ECB) President, Mario Draghi, in a finance conference, highlighted an improvement in the Euro-zone’s economy, since the middle of last year, but at the same time also warned that interest rates on loans would vary significantly across the 17-country bloc.
On the economic front, an official report showed that the Euro-zone’s producer price index fell 0.9% (YoY) in September, defying market expectation for a 0.7% fall and compared to a decline of 0.8% recorded in the previous month.
Meanwhile, in the US, the ISM non-manufacturing PMI surged to a level of 55.4 in October, defying analysts’ call for a decline to 54.0 from a reading of 54.4 recorded in the preceding month. Fed officials expressed diverging views, with the Richmond Fed President, Jeffrey Lacker opposing the continuation of stimulus measures, while San Francisco Fed President, John Williams, expressed his doubts in the recovery in labour markets without these measures.
In the Asian session, at GMT0400, the pair is trading at 1.3511, with the EUR trading 0.29% higher from yesterday’s close.
The pair is expected to find support at 1.3465, and a fall through could take it to the next support level of 1.3419. The pair is expected to find its first resistance at 1.3540, and a rise through could take it to the next resistance level of 1.3569.
Later today, the Eurostat is scheduled to release a report on Euro-zone’s retail sales, which the markets expects to rise 0.7% (YoY) in September, following a 0.3% drop witnessed in the previous month. Investors are also expected to keep a close watch on the release of Markit’s service and composite PMI data, for further guidance in the Euro.
The currency pair is trading just above its 20 Hr and 50 Hr moving averages.
