For the 24 hours to 23:00 GMT, the EUR declined 0.77% against the USD and closed at 1.1223, after the Euro-zone’s final consumer price index (CPI) reading confirmed that the region fell back into deflation in April.
Data showed that the Euro-zone’s CPI dropped 0.2% YoY in April, underlining the difficulties faced by the European Central Bank (ECB) as it struggles to boost consumer prices. Markets were anticipating the consumer price index to fall 0.2%. The preliminary figures had also recorded a fall of 0.2%. On a monthly basis, the Euro-zone CPI remained flat, in line with market expectations, following a 1.2% rise in the previous month.
The greenback gained ground, after the US Federal Reserve’s (Fed) April policy meeting minutes showed the central bank was likely to raise rates in June, if economic data pointed to stronger second-quarter growth and firmer rate of inflation and employment.
In other economic news, mortgage applications in the US recorded a drop of 1.6% in the week ended 13 May 2016, following a rise of 0.4% during the previous week.
In the Asian session, at GMT0300, the pair is trading at 1.1224, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.1186, and a fall through could take it to the next support level of 1.1148. The pair is expected to find its first resistance at 1.1279, and a rise through could take it to the next resistance level of 1.1334.
Going ahead, investors will look forward to the ECB’s April monetary policy meeting minutes, scheduled to release later in the day. Additionally, the US weekly jobless claims and the Chicago Fed national activity index, due later today, will also grab market attention.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.