This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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.