COZforex: For the past trading session, EUR dropped 0.34% against the USD and closed at 1.3571, after official data indicated that unemployment in the region continued to remain unchanged at a record high for a seventh consecutive month.

A report by Eurostat showed that the Euro-zone unemployment rate remained unchanged at 12.1% in November, in line with market expectations. However, the Euro found some support after a report by Eurostat revealed that retail sales in the region surged by 1.4% in November, after a drop of 0.1% in October. Markets were expecting retail sales to increase by mere 0.1%. Meanwhile, the Deutsche Bundesbank reported that the monthly factory orders in Germany increased 2.1% in November, more than market expectations and compared to a revised decline of 2.1% reported in the previous month, thereby suggesting that that the economic health of the nation remains buoyant. In addition, the Germany’s trade surplus widened to a near record in November, to €17.8 billion in November, compared to revised surplus of €16.7 billion recorded in the earlier month. Markets were expecting German trade surplus to rise to €18.0 billion in November.

Yesterday, the European Commission President, Jose Manuel Barroso stated that the recovery in the Euro-zone is on the right track. He further urged Greece to stick to its reform measures.

The US Dollar gained momentum after a report by the Automatic Data Processing, Inc. revealed the US private sector added the largest number of workers since January 2012. The report indicated that the seasonally adjusted monthly private sector employment in the US rose by 238,000 in December, following a revised rise of 229,000 jobs in the previous month. Market had expected private sector employment to increase by 200,000 in December.

Meanwhile, the US Dollar continued to tread upwards after the Federal Open Market Committee minutes’ from the meeting that ended on December 18, revealed that most of the policy makers were of the view that the central bank should resort to winding down its asset purchases in measured steps. Furthermore, members had growing concerns that the benefits of asset purchases were waning; some members had pushed for a larger reduction in purchases at the December meeting.

In technical analysis, COZ senior foreign exchange risk investment trader Desmond Doyle said, EUR/USD is predicted to find support at 1.3541 and a drop through could take it to the next support line of 1.3506. Meanwhile, the pair is predicted to find its first resistance at 1.3624, and a rise through could take it to the next resistance line of 1.3672.

(COZ forex UK)