For the 24 hours to 23:00 GMT, the EUR declined 0.2% against the USD and closed at 1.0701.
The greenback gained ground against its peers, as investors continued to expected that the US Federal Reserve may raise interest rates aggressively under a Donald Trump presidency.
Macroeconomic data indicated that, industrial production in the US surprisingly remained flat on a monthly basis in October, dragged down by a decline in utilities output. Industrial production recorded a revised drop of 0.2% in the previous month, compared to market expectations for a gain of 0.2%. Also, the nation’s mortgage applications slumped by 9.2% in the week ended 11 November 2016, declining to the lowest level since January 2016, following a drop of 1.2% in the previous week. Further, the nation’s NAHB housing market index remained steady at a level of 63.0 in November, meeting market expectations and following a similar reading in the preceding month. Meanwhile, the nation’s manufacturing (SIC) production climbed by 0.2% MoM in October, less than market expectations for a rise of 0.3%. In the prior month, manufacturing production had registered a similar rise of 0.2%.
Separately, the Federal Reserve (Fed) Bank of St. Louis President, James Bullard, indicated that a single policy rate increase, possibly in December, may be sufficient to move monetary policy to a neutral setting. He further stated that the US economy could receive a medium-term boost if the newly elected President, Donald Trump boosts infrastructure spending and tax reforms.
In the Asian session, at GMT0400, the pair is trading at 1.0693, with the EUR trading 0.07% lower against the USD from yesterday’s close.
The pair is expected to find support at 1.0651, and a fall through could take it to the next support level of 1.0609. The pair is expected to find its first resistance at 1.0747, and a rise through could take it to the next resistance level of 1.0801.
Moving ahead, investors would concentrate on the Euro-zone’s consumer price index for October along with the ECB’s monetary policy meeting accounts, due to release in a few hours. Also, a testimony of the US Federal Reserve Chair, Janet Yellen, scheduled later today, would pique investor attention. Moreover, market participants would closely monitor a raft of economic data in the US, consisting of consumer price index, housing starts and building permits, all for October accompanied with the nation’s initial jobless claims, all due 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.