EUR/USD enjoys good figures. Where next?
Posted on December 1, 2009 by Yohay
Filed Under Forex News | 4 Comments
Contrary to last week’s behavior, the Euro rides higher on good figures, and says goodbye to the range once again. Is this another temporary swing? Or is the next target, of 1.5283 already marked?
Also the rising Pending Home Sales in the US help the Euro, as the feeling of world recovery makes the “safe haven” dollar unnecessary. American Pending Home Sales rose by 3.7%, much better the 0.4% fall that was predicted.
Inflation, or the lack of it, is one of the big weaknesses of the Euro. Falling prices in Europe help keep the interest rates low, at 1% for a very long time. Deflation is a sickness that the Euro-zone has. Well, the month of November might be the beginning of a change:
CPI rose by 0.6% in November according to the initial release. This is the first rise since April, and this figure also exceeded early expectations for a 0.5% rise. The cure for deflation might have arrived.
The unemployment rate that was published in Europe has ticked up to 9.8% exactly as expected. But, the more fresh data from Germany was good again. The Unemployment Change number fell again, this time by 7K. Early expectations saw a rise in unemployment.
This is the 5th month in a row that German unemployment squeezes. This is a good sign for the whole continent – the demand for jobs continues to grow.
EUR/USD rises
The reaction to these figures has been positive: EUR/USD has escaped the frustrating range once again, and is now trading at 1.5090, above the 1.5060. Last week, good figures didn’t help the Euro.
The break out of the range came only after the dollar collapsed across the board. The Dubai crisis sent the pair back to the range, and this week’s good figures have their impact.
The close technical barrier is 15144 which was last week’s short lived peak, and also a place where EUR/USD stopped to rest on its way up last year.
The next level is 1.5283. This was the bottom line of the high range that the Euro was trading in throughout last summer, before Lehman Brothers collapsed. The 1.5283 line is a strong resistance line.
Will EUR/USD go there?
This depends a lot on the rate decision by Jean-Claude Trichet on Thursday. For more on the events awaiting the Euro, read the EUR/USD forecast.
Enjoyed the post? You may want to subscribe by RSS feed or Email.Tags: breakout,CPI,Deflation,Dubai crisis,EUR/USD,forex trading,Inflation,Jean-Claude Trichet,range trading,resistance line,support line,Unemployment Change,Unemployment Rate
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