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EUR/USD Bounces from Lowest Since July 2013

September 18, 2014 (Last updated on September 25, 2014) by

EUR/USD rebounded today following the drop to the lowest level since July 2013. Mixed US data played a part in the bounce of the currency pair, but it is likely that the most important reason for the rally was profit-taking after yesterday’s huge drop.

Both housing starts and building permits fell in August. Housing starts were at the seasonally adjusted annual rate of 0.96 million, down from the revised reading of 1.12 million in July. Building permits were at the seasonally adjusted annual rate of 1 million, down from 1.06 million in the previous month. Analysts’ estimates ahead of the report were at 1.04 percent for both indicators. (Event A on the chart.)

Initial jobless claims dropped from 316k to 280k last week, falling far below the value of 312k that was predicted by specialists. (Event A on the chart.)

Philadelphia Fed manufacturing index slipped from 28.0 in August (the highest reading since March 2011) to 22.5 in September, in line with the forecast of 22.8. (Event B on the chart.) The report commented on the result:

Although the current activity index fell from its relatively high reading in August, the other broad indicators increased from their readings last month. The survey’s indicators for future manufacturing conditions reflect general optimism about growth in activity and employment over the next six months.

EUR/USD for 2014-09-18

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