Euro Trading Higher Ahead Of The ECB President, Mario Draghi’s Speech
GCI Financial | Apr 24, 2014 02:56AM ET
For the 24 hours to 23:00 GMT, EUR rose 0.07% against the USD and closed at 1.3817, after Markit Economics reported that the Euro-zone’s composite PMI surprisingly advanced to a reading of 54.0 in April, the highest level since May 2011. Likewise, the Euro-zone’s manufacturing PMI also rose to 3-month high reading of 53.3 while PMI for its service sector advanced to a level of 53.1 in April, reaching a 34-month high. Positive sentiment was also fuelled after Markit’s preliminary PMI for Germany’s manufacturing and service sector also surpassed economists’ estimates for April.
Yesterday, an ECB policymaker, Ewald Nowotny hinted that he did not see any need for the central bank to act immediately and opined that the central bank could wait until June to consider additional measures to counter deflation risks in the economy. Meanwhile, in an interview with the Wall Street Journal, another ECB policymaker, Ardo Hansson highlighted his concerns on the prolonged low level of inflation in the Euro-zone economy and reiterated that the ECB stands ready to take action if inflation rates fall too far below its forecast. He further added that opting for quantitative easing measures would be “operationally complex” for the central bank. Additionally, France’s Finance Minister, Michel Sapin reinforced that a strong Euro is posing a problem for his country and the Euro-zone.
The US Dollar came under pressure, after sales of new homes in the US slumped 14.5% (MoM) in March to a seasonally adjusted annual rate of 384,000, the lowest annual rate since last July. Additionally, the Markit Economics reported that its flash PMI reading for the US manufacturing sector fell slightly to 55.4 in April from a level of 55.5 in March.
In the Asian session, at GMT0300, the pair is trading at 1.3825, with the EUR trading 0.06% higher from yesterday’s close.
The pair is expected to find support at 1.3798, and a fall through could take it to the next support level of 1.3771. The pair is expected to find its first resistance at 1.3854, and a rise through could take it to the next resistance level of 1.3883.
Later today, traders keenly await the ECB President, Mario Draghi’s speech, along with Germany’s IFO data and the US durable goods order, for further cues in the currency pair.
The currency pair is showing convergence with its 20 Hr moving average and is trading just above its 50 Hr moving average.
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