Posted on 01 October 2012.
GCI Forex News - EUR/USD: Euro continues its gains as Spain announced economic reforms and a tough 2013 budget
For the 24 hours to 23:00 GMT, the EUR rose 0.26% against the USD and closed at 1.2911, after Spain announced economic reforms and a tough 2013 budget based primarily on spending cuts.
Speaking at a press conference, the Spain’s budget minister, Soraya Saenz de Santamaria, stated he was confident that the country would meet its deficit target for this year and added that the draft budget for 2013 was based on unchanged economic forecasts, which indicated a light recession next year.
Moreover, the European Union (EU) Economic and Monetary Affairs Commissioner, Olli Rehn, stated that Spain’s detailed timetable for economic reforms goes beyond what the European Commission has asked of Spain and is an ambitious step forward.
In the Euro-zone, economic confidence fell to 85.0 in September, while industrial confidence fell to -16.1 in September. Moreover, services confidence and the business climate indicator declined retreated to -12.0 and -1.3, respectively, in September, while consumer sentiment fell to -25.9 in September.
In Germany, the import prices rose 3.2% (YoY) in August, while export prices increased 1.8% (YoY) in August. Additionally, on a seasonally adjusted basis, the unemployment rate remained unchanged at 6.8% in September, even as the number of unemployed people increased by 9,000. Spanish retail sales declined by 2.1% (MoM) in August, compared to a 7.4% drop in July.
In the Asian session, at GMT0300, the pair is trading at 1.2936, with the EUR trading 0.19% higher from yesterday’s close.
The pair is expected to find support at 1.2862, and a fall through could take it to the next support level of 1.2789. The pair is expected to find its first resistance at 1.2976, and a rise through could take it to the next resistance level of 1.3016.
Trading trends in the pair today are expected to be determined by the release of French gross domestic product and German retail sales data. Investors also await the results of stress tests for Spanish banks due later today.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.