For the 24 hours to 23:00 GMT, the EUR rose 0.32% against the USD and closed at 1.1995, after data showed that German investor morale sharply improved in September.
Data indicated that Germany’s ZEW economic sentiment index climbed more-than-anticipated to a level of 17.0 in September, strengthening for the first time in four months, amid increased optimism among investors in the wake of strong economic growth and increased investment in the Euro-zone’s largest economy. In the previous month, the index had registered a reading of 10.0, while markets had anticipated for an advance to a level of 12.0. Additionally, the nation’s current situation index unexpectedly rose to a six-year high level of 87.9 in September, defying market consensus for a drop to a level of 86.2 and following a reading of 86.7 in the previous month.
Separately, the Euro-zone’s ZEW economic sentiment index climbed to a level of 31.7 in September, less than market expectations for a rise to a level of 32.4 and compared to a level of 29.3 recorded in the previous month. Additionally, the region’s seasonally adjusted construction output rose 0.2% on a monthly basis in July, after recording a revised similar rise in the prior month. Moreover, the region’s seasonally adjusted current account surplus widened to a level of €25.1 billion in July, compared to a revised surplus of €22.8 billion in the prior month.
In the US, data revealed that housing starts surprisingly eased 0.8% on a monthly basis to an annual rate of 1180.0K in August, dropping for the second straight month, amid a notable decrease in multi-family construction. Markets had envisaged housing starts to drop to a level of 1174.0K, compared to a revised level of 1190.0K in the prior month. On the other hand, the nation’s building permits unexpectedly advanced 5.7% on a monthly basis to an annual rate of 1300.0K in August, notching its highest level in seven months and confounding market consensus for a fall to a level of 1220.0K. In the previous month, building permits had registered a revised level of 1230.0K.
In the Asian session, at GMT0300, the pair is trading at 1.2009, with the EUR trading 0.12% higher against the USD from yesterday’s close.
The pair is expected to find support at 1.1970, and a fall through could take it to the next support level of 1.1930. The pair is expected to find its first resistance at 1.2034, and a rise through could take it to the next resistance level of 1.2058.
Going ahead, investors will look forward to Germany’s producer price index for August, slated to release in a few hours. Later in the day, market participants will keenly await the outcome of the Federal Reserve’s (Fed) monetary policy meeting. The central bank is widely anticipated to announce plans on paring back its massive balance sheet. Also, the US existing home sales data for August, due to release later in the day, will be on investors’ radar.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.