EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR rose 1.01% against the USD and closed at 1.1269, following an optimistic speech from the ECB Chief, Mario Draghi.
Yesterday, the ECB President stated that the central bank’s €1.1 trillion asset purchase programs were proceeding well and supporting the Euro-zone’s modest recovery. The Chief, brushed off any hints of premature tapering of the purchases and mentioned that the stimulus will proceed as originally planned.
Also, the ECB raised its inflation forecast for this year from zero to 0.3%. It projected inflation rate at 1.5% and 1.8% for 2016 and 2017 respectively. The bank, citing the weaker Euro, expects the Euro-zone’s GDP to rise by 1.5%, 1.9% and 2% in 2015, 2016 and 2017, respectively.
In other economic news, Germany’s final services PMI fell to a level of 53.00 in May, higher than market expectations of a fall to a level of 52.90, while the Euro-zone’s final services PMI dropped to 53.80 in May, compared to market expectations of a drop to 53.30, indicating that the Euro-zone’s recovery has lost some momentum.
On the other hand, the seasonally adjusted retail sales in the single-currency bloc rose 0.70% on a MoM basis in April, more than market expectations for a rise of 0.60%. It had dropped by a revised 0.60% in the previous month. Meanwhile, unemployment rate in the Euro-zone eased unexpectedly to a level of 11.10% in April, compared to prior month’s level of 11.2%.
In the US, private sector employment registered an increase of 201.00 K in May, compared to a revised advance of 165.00 K in the previous month, while markets were expecting it to rise 200.00 K. Meanwhile, the non-manufacturing PMI fell to a level of 55.70 in May, compared to a reading of 57.80 in the prior month.
Other data showed that the final Markit services PMI recorded a drop to 56.20 in May, compared to a level of 57.40 in the prior month.
In the Asian session, at GMT0300, the pair is trading at 1.1269, with the EUR trading flat from yesterday’s close.
The pair is expected to find support at 1.1137, and a fall through could take it to the next support level of 1.1005. The pair is expected to find its first resistance at 1.1344, and a rise through could take it to the next resistance level of 1.1418.
Trading trends in the pair today are expected to be determined by the US economic data, scheduled later today.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
