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Euro and Pound Climb Higher Ahead of Central Bank Decisions

Euro and Pound Climb Higher Ahead of Central Bank Decisions

Benjamin Spier, Technical Strategist

THE TAKEAWAY: German factory orders decline 2.3% in April -> Euro and Pound climb ahead of central bank decisions

German factory orders declined by 2.3% in April, the biggest decline in five months and disappointing expectations for only a 1% decline. Factory orders declined 0.4% from April 2012, according to the Federal Statistical Office.

The Euro did not react significantly to the disappointing data, and EUR/USD has risen 0.18% over the course of today’s trading session. The pair may see further volatility today following the ECB’s rate decision and the ensuing press conference with President Draghi.

Also in the Euro-zone today, Spain sold bonds for 4.02 billion Euros versus a 4 billion Euro maximum target. Ten year bonds were sold for a 4.517% yield versus 4.452% on May 14. Additionally, Greece unemployment was reported at 26.8%.

The Bank of England rate decision and quantitative easing target will be announced today. GBP/USD continued to rise to a three week high of 1.5450 following yesterday’s better than expected services PMI.

The Euro is currently trading slightly above 1.3100 against the US Dollar, and resistance might be seen around 1.3191, by the 50% retracement of the rise from the November low to the February high. Support might be provided by the key 1.3000 level.

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EURUSDDaily: June 6, 2013

Euro_and_Pound_Climb_Higher_Ahead_of_Central_Bank_Decisions_body_eurusd_daily_chart.png, Euro and Pound Climb Higher Ahead of Central Bank Decisions

Chart created by Benjamin Spier using Marketscope 2.0

-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to instructor@dailyfx.com .

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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