EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 0.08% against the USD and closed at 1.3746, after data showed that, on a non-seasonally adjusted basis, Germany’s GDP rose 1.3% (YoY) in the fourth quarter, the fastest pace since March 2012 and compared to a 1.1% (YoY) rise registered in the preceding quarter. Additionally, the Q4 exports in the nation advanced to the highest-level in three-years, suggesting a sustainable growth in Germany as compared to other nations in the Euro-zone.
Positive sentiment for the single currency was also fuelled after the European Commission, in its winter forecast, upgraded its 2014-growth-outlook on the Euro-zone economy, stating that the recovery in the region was “gaining ground”, although it continued to remain modest. However, at the same time the Commission slashed its inflation forecast for 2014 and 2015, adding that unemployment rate in the region would remain high in the near future.
Elsewhere in the Euro-zone, a report showed that an index measuring the consumer climate in France stood pat at a reading of 94.0 in February, defying analysts’ expectation for a rise to a level of 95.0. Separately, data from Italy revealed that the nation’s trade balance with non-EU countries swung to a deficit of €0.89 billion in January, following a surplus of €3.41 billion in December while another report confirmed that retail sales in the nation unexpectedly fell 0.3% (MoM) in December.
Meanwhile, in the US, the Fed Governor, Daniel Tarullo stated that the financial stability of the nation is a growing concern for the Fed and the central bank should consider certain alterations in its monetary policy tools to address such concerns.
On the economic front, consumer confidence in the US declined to a reading of 78.1 in February, contradicting analysts’ call for a rise to a figure of 80.0, from previous month’s level of 79.4.
Separately, the US Federal Housing Finance Agency reported that its House Price Index (HPI) grew 0.8% (MoM) in December, compared to a revised fall of 0.1% recorded in the previous month.
In the Asian session, at GMT0400, the pair is trading at 1.3740, with the EUR trading slightly lower from yesterday’s close.
The pair is expected to find support at 1.3714, and a fall through could take it to the next support level of 1.3688. The pair is expected to find its first resistance at 1.3767, and a rise through could take it to the next resistance level of 1.3794.
Market participants are expected to keep a tab on Germany’s Gfk consumer confidence data, due for release later today.
The currency pair is trading below its 20 Hr moving average and is showing convergence with its 50 Hr moving averages.
