Euro Trading Tad Higher, Ahead Of Germany’s GFK Consumer Confidence
GCI Financial | Nov 26, 2015 02:16AM ET
For the 24 hours to 23:00 GMT, the EUR declined 0.23% against the USD and closed at 1.0621, languishing bear a 7-month low as traders speculated that the ECB would opt for fresh stimulus measures.
Yesterday, the ECB, in its half-yearly financial stability review, indicated that a looming rate hike by the US Federal Reserve and waning growth in emerging economies especially China, was “of particular concern” to the financial stability of the Euro-zone.
Separately, the ECB’s governing council member, Patrick Honohan, stated that although the Euro-zone is showing signs of better recovery, inflation forecasts are still not moving up and therefore the ECB should continue with its QE programme.
Economic data showed that the French consumer confidence index remained steady at a level of 96.0 in November, compared to market expectations of a drop to 95.0.
The greenback gained ground after the latest batch of U.S. economic data indicated that the economy is strong enough to withstand an interest rate hike by the US Federal Reserve at its next policy meeting in December.
Macroeconomic data showed that the US initial jobless claims in the week ended 21 November recorded a drop to 260.0K, lower than market expectations of a drop to a level of 270.0K, and after recording a revised level of 272.0K in the previous week. Additionally, US durable goods orders rose more-than-expected by 3.0% in October, higher than market expectations for a rise of 1.7%, and compare to a revised drop of 0.8% in the previous month.
In other economic news, the flash Markit services PMI in the US rose to a level of 56.5 in November, compared to a level of 54.8 in the prior month. Markets were anticipating it to rise to a level of 55.1. Moreover, the final Reuters/Michigan consumer sentiment index climbed to a level of 91.3. The preliminary figures had indicated a rise to 93.1. In the previous month, the index had registered a reading of 90.0.
In the Asian session, at GMT0400, the pair is trading at 1.0623, with the EUR trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.0563, and a fall through could take it to the next support level of 1.0502. The pair is expected to find its first resistance at 1.0687, and a rise through could take it to the next resistance level of 1.0750.
Going ahead, investors will look forward to Germany’s Gfk consumer confidence survey data for December, scheduled to be released in a few hours.
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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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