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COZfx: Fed continues tapering although soft US GDP

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COZfx: Fed continues tapering although soft US GDP

Postby dwang » Fri May 02, 2014 2:24 am

COZforex: For the past trading session, the EUR rise 0.42% against the USD and closed at 1.3870. The US Dollar lost ground after data showed that annualised GDP in the US rise 0.1% in the first quarter, the slowest pace of quarterly rise since the end of 2012. However, losses in the greenback were kept in check after the ADP reported that the US private sector added more-than-expected 220,000 jobs in April and after the Fed expressed optimism on the recovery of the US economy and trimmed the size of its monthly QE package by yet another $10 billion.

In the Euro-zone, Italy’s Finance Minister, Pier Carlo Padoan stated that although he did not see any reasons for a strong depreciation in the Euro, a softer Euro was always welcome, which according to him, “would help the economy” by taking-off “some of the pressure towards deflation in Europe.” Separately, an ECB policymaker, Christian Noyer, highlighted his desire for the central bank to take one or two further measures, including injecting more liquidity to strengthen the Euro-zone economy.

On the economic front, Euro-zone’s annual consumer inflation rate accelerated slightly to 0.7% in April, failing to meet economists’ expectations for a rise to 0.8% from previous month’s level of 0.5%. Meanwhile, the number of unemployed people in Germany dropped more-than-expected by 25,000 to 2.872 million last month while the seasonally adjusted unemployment rate remained unchanged at 6.7% in April, the lowest level in two decades. However, retail sales in Germany unexpectedly declined 1.9% in March, for the first time since December 2013.

In technical analysis, COZFX strategist Nigel Boynton said, EUR/USD is predicted to find support at 1.3803, and a drop through could take it to the next support line of 1.3735. Meanwhile, the pair is predicted to find its first resistance at 1.3908, and a rise through could take it to the next resistance line of 1.3945.

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