Topic: COZfx: Euro trading lower before ECB’s policy decision
COZforex: For the last trading session, the EUR dropped 0.18% against the USD and closed at 1.3601, as traders refrained from taking major bets in the Euro-zone’s shared currency ahead of the ECB’s policy decision. Adding to the negative sentiment, Euro-zone’s Markit composite PMI, an index reflecting the Euro-bloc’s business growth, dipped more than market expectations to a reading of 53.5 in May.
Likewise, Euro-zone’s Markit service PMI also disappointed market sentiments, hurt by a lacklustre growth in German and French service sector.
However, Euro-zone’s first quarter GDP rise by a seasonally adjusted annual pace of 0.9%, matching analysts’ estimates and compared to a 0.5% growth in the preceding quarter. Similarly, producer price index in the Euro-bloc eased in-line with economists’ projections for April.
Meanwhile, in the US, the Fed’s Beige Book indicated that economic growth in the world’s largest economy strengthened with a “modest to moderate” growth in all of the US 12 regions, attributed by improving US labour market conditions and a pick-up in the nation’s consumer spending. In other economic news, the US ISM non-manufacturing PMI rise to a 9-month high reading of 56.3 in May while Markit Economics’ PMI on the US service sector advanced to a level of 58.1 last month. However, ADP reported that job creation in the US private sector slowed in May with the economy adding just 179,000 positions, way below analysts’ call for an addition of 210,000 private payrolls.
In technical analysis, COZforex senior currency strategist Ian • Quigley said, AUD/USD is predicted to find support at 1.3581, and a drop through could take it to the next support line of 1.3563. Meanwhile, the pair is predicted to find its first resistance at 1.3628, and a rise through could take it to the next resistance line of 1.3657.
Amid the later course of the day, ECB’s policy decision would be keenly awaited, along with the Euro-zone’s retail sales and the US weekly jobless claims data, for further cues in the currency pair.
(COZ forex UK)