EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.6% against the USD and closed at 1.1856, following comments from the European Central Bank (ECB) Chief, Mario Draghi, as well as outcome of Germany’s general election.
Yesterday, the ECB President, in a speech in Brussels, expressed confidence that inflation will gradually achieve the central bank’s target, but argued that “ample” accommodation from the central bank was still needed to bring inflation to the target in a sustainable way. Draghi also highlighted risks emerging from volatile Euro to the medium-term inflation outlook.
On the data front, Germany’s Ifo business climate index unexpectedly eased to a level of 115.2 in September, defying market expectations of a rise to a level of 116.0, amid concerns over recent strength in the Euro and uncertainty linked to the general elections. In the previous month, the index had registered a level of 115.9. Further, the nation’s Ifo business expectations index recorded an unexpected drop to a level of 107.4 in September, confounding market expectations for an advance to a level of 108.0 and after recording a reading of 107.9 in the previous month. Additionally, the nation’s Ifo current assessment index surprisingly dropped to a level of 123.6 in September, compared to a level of 124.6 in the prior month.
In economic news, the US Chicago Fed national activity index dropped more-than-anticipated to a level of -0.31 in August, compared to a revised reading of 0.03 in the previous month, while markets were expecting the index to fall to a level of -0.25. On the other hand, the nation’s Dallas Fed manufacturing business index recorded an unexpected rise to a level of 21.3 in September, defying market consensus for a drop to a level of 11.5 and following a reading of 17.0 in the prior month.
In the Asian session, at GMT0300, the pair is trading at 1.1858, with the EUR trading slightly higher against the USD from yesterday’s close.
The pair is expected to find support at 1.1814, and a fall through could take it to the next support level of 1.1771. The pair is expected to find its first resistance at 1.1919, and a rise through could take it to the next resistance level of 1.1981.
Amid a lack of major macroeconomic releases in the Euro-zone today, investors will focus on a speech by the Federal Reserve Chair, Janet Yellen, scheduled later in the day. Market participants would also eye the US consumer confidence index for September and new home sales data for August, scheduled to release later in the day.
The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.
