EURUSD Movement
On Friday, EUR declined 0.37% against the USD and closed at 1.3360. The US Dollar gained ground against the Euro after upbeat US non-farm payrolls data strengthened the prospect for the Fed to taper its stimulus package sooner than market expectations. The US non-farm payroll additions rose to a level of 204,000 in October, way above analysts’ expectation for an increase of 125,000 and compared to previous month’s reading of 163,000.
However, gains in the greenback were capped after Atlanta Fed President, Dennis Lockhart, warned that the central bank is still far from its inflation and employment goals. He also suggested that the Fed’s “aggressive monetary policy should remain very accommodative for quite some time” to assist economic growth. Adding to the negative sentiment was a report from Reuters/University of Michigan, which indicated that the US consumer sentiment declined unexpectedly to a reading of 72.0 in November, from a level of 73.2 registered in the preceding month.
Meanwhile, in the Euro-zone, German trade surplus surged to a level of €18.8 billion in September, defying market estimate for the surplus to decline to €15.5 billion from the previous month’s surplus of €15.8 billion. However, French trade deficit widened unexpectedly to a reading of €5.80 billion in September, compared to a revised deficit of €5.09 billion registered in the earlier month.
In the Asian session, at GMT0400, the pair is trading at 1.3362, with the EUR trading tad higher from Friday’s close.
The pair is expected to find support at 1.3306, and a fall through could take it to the next support level of 1.3251. The pair is expected to find its first resistance at 1.3428, and a rise through could take it to the next resistance level of 1.3495.
Market participants are expected to keep a close watch on the Bundesbank President, Dr Jens Weidmann’s speech, scheduled to commence later today, for further guidance in the Euro.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
