The dollar edged up against the euro after the release of better-than-expected manufacturing data in January. The comments from European Commission on Thursday also supported the movement, according to which the economic confidence in the euro zone decreased further in January while business climate indicator also dropped.
The economic sentiment indicator in the euro zone stood at 101.7 in January, down by 1.7 points from that in December last year. The industrial confidence component of the indicator in January fell to 1 from 2 in the euro area, while consumer confidence deteriorated to -12 from -9 in December.
Most of the data from the US till released are not supporting the recovery of the economy and has projected broad crisis in the U.S housing and employment sector. Traders will eye the release of key non farm pay rolls data from the U.S for further direction.
The US President Bush had called for a ‘stimulus package’ of roughly $145 billion in tax relief for individuals and businesses, in an attempt to boost the economy.
Medium Term Outlook
Active trading above 1.4510 is the sign of weakness in dollar. Supports are 1.4630, 1.4755, 1.4788, 1.4966 and 1.5052. Resistances are 1.4450, 1.4320 and 1.4277. More weakness can be expected above 1.4968
In spot trading, dollar closed at 1.4798 (1.4865) against the euro, after trading in the range 1.4955– 1.4783.
Last day, DEUR March traded in the range 149.20 – 147.89 and closed at 147.95
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