EURUSD Movement
For the 24 hours to 23:00 GMT, the EUR declined 0.58% against the USD and closed at 1.0808, on the back of downbeat economic data across the Euro-zone.
Data showed that Euro-zone’s flash Markit manufacturing PMI advanced less than expected to a level of 52.3 in January, from a reading of 53.2 in the previous month while market expected it to rise to a level of 53.0, registering its lowest reading since October 2015. Further, the Euro-zone’s preliminary Markit services PMI rose less than anticipated to a level of 53.6 in January, compared to prior month’s level of 54.2.
On the other hand, Germany’s preliminary Markit manufacturing PMI rose less than expected to a level of 52.1 in January while market expected it to rise to a level of 53 and following a reading of 53.2 in the previous month, touching its lowest level in 3 months. Additionally, the nation’s flash Markit services PMI rose less than expected to a level of 55.4 in January, after recording a reading of 56 in the previous month.
Separately, the ECB President, Mario Draghi, stated that ECB has plenty of instruments at its disposal to stoke consumer prices and will do what is needed for the same.
In the US, US Chicago Fed national activity index climbed to a level of -0.22 in December, higher than market expectations of an advance to a level of -0.15.Additionally, the nation’s preliminary Markit manufacturing PMI surprisingly rose to a level of 52.7 in December, while markets expected it to advance to a level of 51.0, following previous month’s reading of 51.2. Moreover, US Existing homes sales data increased 14.7% MoM in December, beating market expectations for a gain of 9.2%, after recording a drop of 10.5% in the preceding month.
In the Asian session, at GMT0400, the pair is trading at 1.0814, with the EUR trading marginally higher from Friday’s close.
The pair is expected to find support at 1.078, and a fall through could take it to the next support level of 1.0747. The pair is expected to find its first resistance at 1.0855, and a rise through could take it to the next resistance level of 1.0897.
Going ahead, investors will look forward to Germany’s IFO business climate data for January, scheduled to be released in a few hours.
The currency pair is showing convergence with its 20 Hr and is trading below its 50 Hr moving average.