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Forex News: Euro Breaks a 13-Month High Following Improved Consumer Confidence

Forex News: Euro Breaks a 13-Month High Following Improved Consumer Confidence

Benjamin Spier, Technical Strategist

THE TAKEAWAY: Euro-zone consumer confidence confirmed at -23.9 in January -> ECB predicts an upcoming recovery -> Euro sets a new 13-month high

The Euro-area business climate indicator improved to an eight month high in January, according to the European Commission. The indicator was reported at -1.09, which although was worse than the expected -1.00 result, was still an improvement from a revised -1.11 in January. Additionally, the Euro-zone consumer confidence was confirmed at -23.9 in January, an improvement from December’s consumer confidence.

The Euro-zone economic confidence indicator rose to 89.2 from December’s 87.8 confidence level, and the industrial confidence for January rose to -13.9 from a previous -14.2.

The European Central Bank predicted a Euro-zone recovery later in 2013, and Euro investors are looking for signs of that recovery. Recent PMI’s showed a slowdown of the decline in composite output, and today’s indicators also indicated an improving economic confidence.

The Euro set a new 13-month high against the US Dollar in today’s Forex trading while climbing well above 1.3500. The rally continued following the release of the Euro-zone consumer confidence indicator. At the time of this writing, EUR/USD is trading at 1.3550, and resistance may be provided by the 1.400 key level. Support could now be provided by the broken resistance line of 1.3500.

EURUSD Daily: January 30, 2013

Euro_Breaks_a_15-Month_High_Following_Improved_Consumer_Confidence_body_eurusd_daily_chart.png, Forex News: Euro Breaks a 13-Month High Following Improved Consumer Confidence

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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