EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 0.29% against the USD and closed at 1.1393.
On the macro front, Germany’s Gfk consumer confidence index remained steady at a level of 10.8 in March, at par with market expectations.
The US dollar declined against a basket of currencies yesterday, following dovish comments from the US Federal Reserve Chairman, Jerome Powell.
In the US, data indicated that the US building permits unexpectedly rose 0.3% on a monthly basis to an annual rate of 1326.0K in December, defying market consensus for a decline to a level of 1290.0K. Building permits had registered a revised reading of 1322.0K in the prior month. Further, the nation’s CB consumer confidence index climbed to a level of 131.4 in February, compared to a revised level of 121.7 in the preceding month. Market participants had envisaged the index to rise to a level of 124.9. Additionally, the Richmond Fed manufacturing index advanced to a level of 16.0 in February, surpassing market expectations for a rise to level of 5.0 and compared to a level of -2.0 in the previous month. Further, the house price index rose 0.3% on monthly basis in December, undershooting market consensus for an increase of 0.4%. In the prior month, index had registered a rise of 0.4%.
On the flipside, housing starts unexpectedly plunged to two-year low level by 11.2% to an annual rate of 1078.0K in December, compared to a revised reading of 1214.0K in the prior month. Market participants had envisaged the housing starts to advance to 1256.0K.
The Fed Chairman, Jerome Powell, in his testimony, reiterated that the Fed would remain “patient” on further interest rate hikes, citing the various “crosscurrents and conflicting signals.” Meanwhile, Jerome Powell indicated that the US economic outlook was “generally favourable”, however warned of challenges from overseas. Further, he warned of growing risks in the economy, including a global slowdown, volatile financial markets and uncertainty related to the US trade policy.
In the Asian session, at GMT0400, the pair is trading at 1.1379, with the EUR trading 0.12% lower against the USD from yesterday’s close.
The pair is expected to find support at 1.1348, and a fall through could take it to the next support level of 1.1318. The pair is expected to find its first resistance at 1.1406, and a rise through could take it to the next resistance level of 1.1434.
Moving ahead, traders would closely monitor the Euro-zone’s M3 money supply for January along with the economic confidence index, business climate indicator, the consumer confidence index, all for February, set to release in a few hours. Later in the day, the US advance goods trade balance, factory orders and durable goods orders, all for December and pending home sales for January, will keep traders on their toes.
The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
