EURUSD Movement
For the 24 hours to 23:00 GMT, EUR rose 0.15% against the USD and closed at 1.3698.
On the macro front, the import price index in Germany rose 0.1% on a monthly basis in November, compared to a 0.7% drop recorded in the preceding month. Markets expected the German import price index to fall 0.2% in November. Additionally, the producer price index in Spain fell 0.9% in November on a monthly basis, following a revised 0.5% decrease recorded in the earlier month. Furthermore, the consumer confidence index in Italy declined to a level of 96.2 in December, following a revised level of 98.2 reported in the preceding month. Markets were expecting the index to rise to a reading of 98.8 in December.
On the political front, yesterday, Italian parliament finally approved the government’s 2014 budget, which would see to it that the nation’s public deficit remains just within European Union borrowing limits. Meanwhile, the International Monetary Fund (IMF) in its second review of Cyprus’ performance under the financial adjustment programme warned the nation that the efforts taken to repay its massive debt, may weigh on its growth for almost a decade. However, IMF pointed out that the program was on track and Cyprus’s recession, although severe, was shallower than expected.
In the US, data indicated that personal spending increased 0.5% on a seasonally adjusted monthly basis in November, higher than the market expectation for a gain of 0.4% and following a revised rise of 0.4% recorded in October. Meanwhile, personal income in the US advanced 0.2% in November, compared to a drop of 0.1% in the preceding month. Markets expected the US personal income to increase 0.5% in November. Moreover, the University of Michigan and Thomson Reuters latest survey indicated that the US final consumer sentiment index rose to a reading of 82.5 on a monthly basis in December, in line with the preliminary estimate and compared to a final reading of 75.1 reported in November. Separately, according to the Federal Reserve Bank (Fed) of Chicago, the National Activity Index advanced to a reading of 0.60 on a monthly basis in November, higher than market expectation of a level of 0.30 and following a revised level of -0.07 recorded in October.
Yesterday, the Federal Reserve Bank of Richmond President, Jeffrey Lacker supported the Fed’s last week’s tapering decision stating that looking at the recent upbeat trend in the US data, it was the “right decision”.
In the Asian session, at GMT0400, the pair is trading at 1.3678, with the EUR trading 0.15% lower from yesterday’s close.
The pair is expected to find support at 1.3661, and a fall through could take it to the next support level of 1.3643. The pair is expected to find its first resistance at 1.3707, and a rise through could take it to the next resistance level of 1.3735.
With no major releases from the Euro-zone today, trading trends in the pair would be determined by data from the US.
The currency pair is trading below its 20 Hr moving average and is showing convergence with its 50 Hr moving average.
