EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 1.09% against the USD and closed at 1.3669. The US Dollar gave up ground after two of the Fed’s officials highlighted their support for the central bank to continue with its asset-purchase programme for a longer time. Chicago Fed President, Charles Evans, stated that the central bank should not start tapering the size of its asset purchases package as the data used to gauge the economy’s health stopped during the government shutdown. Separately, Dallas Fed President, Richard Fisher warned about a housing bubble in the US economy and indicated that he would not support a reduction in the quantitative easing program at a Fed meeting later this month. However, Esther George, Kansas City Fed President, highlighted her support for the Fed to start slowing down the pace of its bond-buying programme at its October policy meeting.
On the economic front, a report showed that initial jobless claims in the US declined to a level of 358,000 during the week ended October 11, less than analysts’ expectation for a fall to 335,000 from a reading of 373,000 recorded in the earlier week. Another report revealed that Philadelphia Fed manufacturing activities fell to a reading of 19.8 in the month of October, less than market expectation for a drop to 15.0 and compared to previous month’s level of 22.3.
Meanwhile, in the Euro-zone, on a non-seasonally adjusted basis, current account surplus declined to a level of 12.0 billion in August, less than analysts’ call for a fall to 10.0 billion and compared to a surplus of 26.1 billion witnessed in the preceding month. Additionally, on a seasonally adjusted basis, the construction output in the region rose 0.5% (MoM) in August, following a 0.7% rise seen in the previous month.
In the Asian session, at GMT0300, the pair is trading at 1.3664, with the EUR trading marginally lower from yesterday’s close.
The pair is expected to find support at 1.3575, and a fall through could take it to the next support level of 1.3486. The pair is expected to find its first resistance at 1.3718, and a rise through could take it to the next resistance level of 1.3772.
Amid lack of economic releases from the Euro-zone, market participants are expected to keep a tab on global economic news for further guidance in the pair.
The currency pair is showing convergence with its 20 Hr moving average and is trading above its 50 Hr moving average.
