EUR/USD is trading at $1.3513, slightly down on the day. The eurozone services purchasing managers index (PMI) report for January came in at 51.6, which was in line with estimates but a drop from the December reading of 51.9. Any reading above the 50.0 mark indicates an expansion, which is positive, but a drop in January is a decline nonetheless.
The European Central Bank (ECB) will make its interest-rate announcement and statement tomorrow at 12.45pm and 1.30pm respectively, and the consensus is for rates to remain at 0.25%. There is growing speculation that the ECB will introduce a stimulus package to tackle deflation, and if tomorrow’s statement discusses the possibility of a bond-buying scheme we could see the euro drop lower.
As Brenda Kelly explained, the $1.35 mark is acting as a support level. If this is broken we could see the euro head towards the 200-day moving average of €1.338.