For the 24 hours to 23:00 GMT, EUR declined 0.30% against the USD and closed at 1.2208, amid risk aversion among investors after European Central Bank (ECB) stated that the economic outlook remain weak in the Euro-zone.
Adding to the negative tone, Greek unemployment hit a record 22.5% in April, from a revised 22% in March.
Meanwhile, ECB policymaker, Klaas Knot, stated that if the Euro-zone economy continues to deteriorate the bank could cut its main interest rate below 0.75%.
On the economic front, industrial production in the Euro-zone rose 0.6% (MoM) in May, following a 1.1% drop in the April. Moreover, German wholesale price index decreased 1.1% (MoM) in June, following the 0.7% drop registered in the previous month. Separately, the consumer prices index in France remained stable in June, after falling 0.1% in May.
In a bond auction, Italian Treasury raised the targeted €7.5 billion from the sale of its 12-month bills, with borrowing costs falling to 2.69%, compared to 3.97% recorded in previous sale on June 13.
Yesterday, the Ireland’s Finance Minister, Michael Noonan stated that Ireland passed the latest review of its EU-IMF bailout program.
In the Asian session, at GMT0300, the pair is trading at 1.2204, with the EUR trading marginally lower from yesterday’s close, after the rating agency, Moody’s, downgraded Italy’s government bond rating by two notches to ‘Baa2’ from ‘A3’, and warned it could cut it further.
The pair is expected to find support at 1.2166, and a fall through could take it to the next support level of 1.2127. The pair is expected to find its first resistance at 1.2244, and a rise through could take it to the next resistance level of 1.2283.
In absence of significant economic indicators today, we expect the Euro to take direction from the outcome of Italian debt auction.
The currency pair is trading between its 20 Hr and 50 Hr moving average.