EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.33% against the USD and closed at 1.3902, after an ECB Executive Board member, Benoit Coeure stated that he sees no signs of deflation in the Euro-zone economy at present. However, at the same time, he also cautioned that possible deflation risks still persists in the economy, adding that the central bank has number of instruments at its disposal to combat such risks.
Separately, another ECB policymaker, Peter Praet projected interest rates in the region to remain at current or lower levels even if economic conditions improve in the Euro-bloc. He further added that if the central bank opts for publishing ‘accounts’ of governing council minutes, then the need for forward guidance might be reduced in future.
Meanwhile, speaking at a conference in Madrid, Luis Linde, an ECB Governing Council member, hinted that a further appreciation in the Euro-zone’s common currency could call for an additional policy measures by the ECB.
In economic news, on a seasonally adjusted basis, industrial production in the Euro-zone unexpectedly declined 0.2% for a second straight month in January. Separately, non-farm payrolls in France registered a modest 0.1% rise in the fourth-quarter, following a 0.1% drop registered in the preceding quarter.
In the US, Stanley Fischer, the nominee for Fed Vice Chairman, opined that the US economy was still in need of the central bank’s ultra-easy monetary policy as unemployment rate in the nation still remains high and inflation below the Fed’s target. He noted that the economy has made a lot of progress in recent years however economic sanity has not been completely restored.
Yesterday, the US Treasury Secretary Jacob Lew urged that the US would do everything to help Ukraine and called on Russia to implement appropriate measures in order to resolve the crisis. Furthermore, he indicated that Ukraine may need $15 billion or more as international aid package and the IMF should make sure that it turns out to be the “first responder.”
In the Asian session, at GMT0400, the pair is trading at 1.3930, with the EUR trading 0.20% higher from yesterday’s close.
The pair is expected to find support at 1.3867, and a fall through could take it to the next support level of 1.3803. The pair is expected to find its first resistance at 1.3969, and a rise through could take it to the next resistance level of 1.4007.
Market participants are expected to keep a close tab on the release of the ECB monthly report, which would provide an insight on the prevailing economic situation in the Euro-zone.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
