For the 24 hours to 23:00 GMT, the EUR declined 0.35% against the USD and closed at 1.2407, following dovish comments from the European Central Bank (ECB) Governing Council member, Erkki Liikanen and softer-than-expected economic releases in the Euro-zone.
The ECB’s policymaker, Erkki Liikanen, stated that the central bank needs to remain patient with monetary policy tightening as inflationary pressures in the common currency region may remain lower-than-expected despite robust growth.
On the macro front, the Euro-zone’s final consumer confidence index remained steady at a level of 0.1 in March, confirming the preliminary print. On the contrary, the region’s economic sentiment indicator eased more-than-estimated to a level of 112.6 in March, dropping for the third consecutive month and compared to market expectations for a fall to a level of 113.3. The index had registered a revised level of 114.2 in the previous month.
In the US, data revealed that the CB consumer confidence index recorded an unexpected drop to a level of 127.7 in March, defying market consensus for a rise to a level of 131.0, amid gloomier outlook over the world’s largest economy. The index had registered a revised level of 130.0 in the prior month.
In other economic news, the nation’s Richmond Fed manufacturing index dropped more-than-estimated to a level of 15.0 in March, after recording a reading of 28.0 in the previous month and compared to market expectations for a fall to a level of 22.0.
In the Asian session, at GMT0300, the pair is trading at 1.2417, with the EUR trading 0.08% higher against the USD from yesterday’s close.
The pair is expected to find support at 1.2368, and a fall through could take it to the next support level of 1.2319. The pair is expected to find its first resistance at 1.2471, and a rise through could take it to the next resistance level of 1.2525.
Going ahead, traders would keep a close watch on Germany’s GfK consumer confidence index for April, slated to release in a while. Moreover, the US 4Q GDP numbers along with advance goods trade balance and pending home sales data, both for February, due to release later in the day, will keep investors on their toes.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
