For the 24 hours to 23:00 GMT, the EUR rose 0.36% against the USD and closed at 1.3926, after retail sales in the Euro-zone economy rose for the third-straight month in March and after Markit Economics reported that its composite PMI for the Euro-area registered its highest reading since May 2011 in April. Positive sentiment was also fuelled after data from Spain showed that the number of unemployed people in the nation fell sharply in April and that its services sector grew at the fastest rate in just over seven years, last month. Separately, Markit PMI for Germany and Italy’s advanced in April while growth in France’s services sector dropped to a reading of 50.4 in the previous month.
In a noteworthy event, the Organization for Economic Cooperation and Development (OECD), upgraded its growth-forecast on the Euro-zone economy to 1.2% for 2014 and 1.7% for 2015, compared to its earlier growth estimate of 1.0% and 1.6%, respectively. However, the organisation urged the ECB to slash its interest rate and undertake additional stimulus measures to support recovery and end the prolonged period of low-inflation in the Euro-zone economy.
However, the OECD slashed its growth forecast for the world economy to 3.4% this year, down from its 3.6% November forecast. Likewise, for the US economy, the OECD projected a growth of 2.6% in 2014, down from its previous growth-estimate of 2.9% in November, citing bad weather in December and a government shutdown in October.
On the US economic front, trade deficit in the world’s largest economy shrank to $40.4 billion in March, from a deficit of $41.9 billion in the previous month. Meanwhile, in his speech at the New York University, the US Fed Governor, Jeremy Stein, stated that the central bank “is currently in a very good position” to continue tapering its asset purchases in “further measured steps” through the rest of the year.
In the Asian session, at GMT0300, the pair is trading at 1.3927, with the EUR trading tad higher from yesterday’s close.
The pair is expected to find support at 1.3883, and a fall through could take it to the next support level of 1.3840. The pair is expected to find its first resistance at 1.3961, and a rise through could take it to the next resistance level of 1.3996.
Market participants are expected to keep a tab on Germany’s factory orders and French industrial output and trade balance data, slated for release later today.
The currency pair is showing convergence with its 20 Hr moving average and is trading above its 50 Hr moving average.