Euro Trading Higher Ahead Of Markit PMI Data
GCI Financial | Jun 23, 2014 01:59AM ET
On Friday, the EUR declined 0.15% against the USD and closed at 1.3589, as ECB policymaker, Yves Mersch, opined that the Euro-zone economy had not yet exited its financial and economic crisis while urging the government of Euro-zone’s individual member states to deliver reforms needed to keep their public finances solid. However, another ECB official, Benoit Coeure, dismissed the need for an immediate ECB QE measure by stating that the central bank could carry out large-scale asset purchases should inflation in the region remain low for a protracted period of time, “but it isn’t needed today.” Separately, at a conference in Athens, ECB’s Yannis Stournaras backed several analysts’ view that the central bank’s newly introduced long-term lending programme to inject cheap cash to lenders would have only limited impact on debt-ridden economies of the Euro-bloc.
In economic releases, data showed that consumer confidence in the Euro-zone economy unexpectedly deteriorated by 0.3 points to a reading of -7.4 in June, ending a run of six consecutive months of improvement. Separately, a report from the ECB revealed that Euro-zone’s current account surplus grew to a seasonally adjusted €21.5 billion in April, compared to a revised €19.6 billion in March.
Meanwhile, during the weekend, in an interview published in a Dutch newspaper, the ECB President, Mario Draghi, projected interest rates in the Euro-zone economy to probably remain low for at least another 2 1/2 years to support economic recovery in the region, which according to him, “is still weak and unevenly distributed across the Euro area.” Likewise, an ECB Governing Council member, Ewald Nowotny, also echoed Mario Draghi’s view that central bank would not raise its interest rates from record lows until 2016, when growth in the Euro-zone economy is most likely to pick up more strongly.
In the Asian session, at GMT0300, the pair is trading at 1.3605, with the EUR trading 0.12% higher from Friday’s close.
The pair is expected to find support at 1.3568, and a fall through could take it to the next support level of 1.3530. The pair is expected to find its first resistance at 1.3639, and a rise through could take it to the next resistance level of 1.3672.
During the later course of the day, traders would eye Euro-zone’s Markit manufacturing, service and composite PMI data for June, along with the US manufacturing PMI and existing home sales data.
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The currency pair is showing convergence with its 20 Hr moving average and is trading below its 50 Hr moving average.
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