For the 24 hours to 23:00 GMT, EUR declined 0.32% against the USD and closed at 1.3182, after Standard Poor’s downgraded Spain’s credit rating to ‘BBB+/A-2’ from ‘A/A-1’, citing that it expects further deterioration of the country’s public finances amid economic contraction and the need to support banks. The ratings agency said that it is also worried over the increasing likelihood that Spain’s government will need to provide further fiscal support to the banking sector. As a result, there are heightened risks that Spain’s net general government debt could rise further.
Additionally, the Euro lost momentum, amid sluggish euro-zone economic data. In Euro-zone, the economic sentiment index declined to 92.8 in April, compared to 94.5 in March. Market expected the index to drop to 94.2. Also, the industrial confidence index fell to -9.0 in April, from a reading of -7.1 in March. Market had expected industrial confidence index to decline to -7.0 in April. Additionally, consumer confidence index fell to -19.9 in April, compared to -19.1 in March. Market had expected the index to drop to -19.8 in April.
Meanwhile, in Germany, the Consumer Price Index (CPI) rose 0.2% (MoM) in April, compared to 0.3% rise in previous month.
Separately, European Central Bank (ECB) President Mario Draghi, stated that banks and governments across Europe must now take full responsibility for the resolution of the region’s debt crisis.
In the Asian session, at GMT0300, the pair is trading at 1.3203, with the EUR trading 0.16% higher from yesterday’s close.
The pair is expected to find support at 1.3166, and a fall through could take it to the next support level of 1.3128. The pair is expected to find its first resistance at 1.3251, and a rise through could take it to the next resistance level of 1.3300.
Trading trends in the pair today are expected to be determined by release of Gfk consumer confidence survey data in Germany.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.