For the 24 hours to 23:00 GMT, the EUR rose 0.57% against the USD and closed at 1.1034, as comments from European policymakers fuelled uncertainty over the scale of a European Central Bank stimulus package expected next week.
On the data front, Euro-zone’s final services PMI advanced to a level of 53.5 in August, compared to a level of 53.2 in the previous month. Market participants and preliminary figures had indicated the PMI to record a rise to a level of 53.4. Meanwhile, the region’s seasonally adjusted retail sales fell 0.6% on a monthly basis in July, declining by the most since December 2018 and in line with consensus. In the prior month, retail sales had registered a revised increase of 1.2%.
Separately, in Germany, the Markit services PMI unexpectedly climbed to a level of 54.8 in August, defying market anticipation for drop to a level of 54.4. In the preceding month, the PMI had registered a level of 54.5. The preliminary figures had also indicated a drop to 54.4.
In the US, data showed that trade deficit narrowed to $54.0 billion in July, amid surge in exports and less than market expectations for a deficit of $53.5 billion. In the previous month, the US recorded a revised deficit of $55.5 billion. Meanwhile, the nation’s MBA mortgage applications fell 3.1% on a weekly basis in the week ended 30 August 2019, following a decline of 6.2% in the prior week.
The Federal Reserve’s (Fed) latest Beige Book revealed that most of the districts expanded at a modest pace from June through August. Further, the report indicated that majority of businesses remained optimistic about the near-term outlook, despite growing concerns regarding tariffs and trade policy uncertainty.
In the Asian session, at GMT0300, the pair is trading at 1.1031, with the EUR trading slightly lower against the USD from yesterday’s close.
The pair is expected to find support at 1.0990, and a fall through could take it to the next support level of 1.0948. The pair is expected to find its first resistance at 1.1056, and a rise through could take it to the next resistance level of 1.1080.
Looking ahead, traders would await Germany’s factory orders for July and the Markit construction PMI August, set to release in a few hours. Later in the day, the US ADP employment change, the ISM services index and the Markit services PMI, all for August along with factory orders and durable goods orders, both for July, will keep traders on their toes. Also, the US initial jobless claims for will be on investors’ radar.
The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
