Forex - EUR/USD remains lower, eyes on ECB meeting

Shutterstock photo - The euro remained lower against the U.S. dollar on Monday, as markets were jittery after U.S. lawmakers failed on Friday to avert a first series of automatic spending cuts, while investors looked ahead to the European Central Bank's upcoming policy meeting.

EUR/USD hit 1.2982 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.3004, slipping 0.10%.

The pair was likely to find support at 1.2967, the low of March 1 and a two-and-a-half month low and resistance at 1.3101, the high of March 1.

Investor confidence weakened after USD85 billion of automatic spending cuts, known as the "sequestration", began on Friday as lawmakers could not agree on spending cuts and tax reform to tackle the country's budget deficit.

U.S President Barack Obama said on Sunday he could compromise with Republican lawmakers by cutting welfare entitlements such as Medicare.

Meanwhile, a recent string of weak data from the euro zone fueled speculation that the ECB may cut interest rates at its monthly policy meeting this week.

Earlier in the day, Sentix said its investor confidence index for the euro zone dropped to minus 10.6 in March from a reading of minus 3.9 the previous month, exceeding expectations for a decline to minus 5.2.

The report came after preliminary data on Friday showed that consumer price inflation in the bloc ticked down to a annualized rate of 1.8% in February, while a separate report showed that the unemployment rate in the region rose to a new record high of 11.9% in January.

The euro was also lower against the pound with EUR/GBP shedding 0.21%, to hit 0.8638.

Also Monday, official data showed that the number of unemployed people in Spain rose far less-than-expected in February, increasing by 59,400 after a 132,100 rise the previous month.

Analysts had expected the number of unemployed people to rise by 77,500 last month. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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