The markets are undergoing serious mood swings. After the dollar began correcting the earlier falls, two important US figures sent it back down.
EUR/USD moved up once again, but this time it stopped short of challenging 1.30. The pair made a false break of this level beforehand. USD/JPY, which already made a recovery of 100 pips from the abyss, is sliding a bit.
Update: EUR/USD breaks 1.30 once again. It seems that it has more conviction this time as it already touches the next resistance line.
Update 2: US pending home sales disappoint and EUR/USD extends its gains.
The second estimate of GDP came out a bit lower than expected: 2.4% instead of 2.5% predicted and 2.5% recorded last time. The upside is that the mix inside is better: more consumer spending.
Weekly jobless claims, which are now more important due to the Fed’s bigger focus on jobs for tapering QE, disappointed by rising to 354K. Also last week’s number was revised to the upside: 344K instead of 340K originally reported. Expectations were for 342K this time. The upside is in the continuing claims: they are under 3 million for a second week in a row.
All in all, the data is not terrible – just small disappointments. Yet this is enough to release some of the wind from the greenback’s sails.
The market is awaiting another important US release at 14:00 GMT: See how to trade the US pending home sales with EUR/USD.
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