For the 24 hours to 23:00 GMT, EUR fell 0.59% against the USD and closed at 1.3298, as investors avoided riskier currencies amid US debt ceiling concerns.
Concerns heightened after Fitch Ratings reiterated its warning that a delay in raising the US government’s debt ceiling would lead to a formal review of the country’s AAA sovereign credit rating.
Economic data from Europe was uninspiring, as German economy shrank at the end of 2012, an official report showed, as weaker global demand and recessions throughout Southern Europe triggered a slide in business investment. Losses in the Euro were capped after Euro-zone trade surplus widened to €11.0 billion in November, from €7.4 billion in October.
Additionally, consumer price index in Germany rose 0.9% (MoM) in December, while on an annual basis, inflation grew 2.1% in December. According to MINEFA, France’s budget deficit widened to €103.4 billion for January to November 2012 period, compared to a deficit of €94.6 billion recorded in October.
Late yesterday, Euro-group leader, Jean-Claude Juncker, cautioned that the Euro’s gain against the US Dollar in the past six months is posing a fresh threat to the European economy just as it shows signs of escaping the debt crisis.
In the Asian session, at GMT0400, the pair is trading at 1.329, with the EUR trading marginally lower from yesterday’s close.
This morning, the World Bank indicated that the global economy might expand by 2.4% in 2013 compared to an earlier forecast of a 3.0% growth, citing weakness in developed economies.
The pair is expected to find support at 1.3240, and a fall through could take it to the next support level of 1.3190. The pair is expected to find its first resistance at 1.3364, and a rise through could take it to the next resistance level of 1.3438.
Trading trends in the pair today are expected to be determined by the release of the consumer price index data, while in the US investors eye the Fed’s Beige Book, industrial production and the consumer price index data.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.Publication source