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Dollar’s Rally Stalls Despite Amazing Economic Reports

May 26, 2016 by

US economic reports released today were stellar, but this did not prevent EUR/USD from rising for the second day. One of the possible reasons for such behavior can be skepticism of market participants regarding chances for a June interest rate hike from the Federal Reserve. Traders wait for the Friday’s speech of Fed Chairperson Janet Yellen who may bring more clarity to the issue.

Initial jobless claims dropped from 278k to 268k last week whereas experts had predicted just a meager drop to 275k. (Event A on the chart.)

Durable goods orders rose by 3.4% in April, exceeding the predicted minuscule rise of 0.3% by a wide margin. Furthermore, the March increase got a huge revision from 0.8% to 1.9%. (Event A on the chart.)

Pending home sales jumped as much as 5.1% in April after rising 1.6% in March (revised up from 1.4%). And yet again the actual report was far better than forecasts (which were promising an increase in a neighborhood of just 0.6%). (Event B on the chart.)

EUR/USD as of 2016-05-26

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