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EUR/USD Down as Signs of Economic Growth in USA Trim Stimulus Bets

August 29, 2012 by

EUR/USD weakened today as the positive macroeconomic data from the United States reduced incentive for the Federal Reserve to ease its monetary policy. US economy continued to grow and the housing market showed signs of strength. Those who bet on quantitative easing from the Fed feel themselves less certain now.

US GDP rose 1.7% in the second quarter of 2012, matching forecasts. GDP expanded 2.0% in the first quarter. (Event A on the chart.)

Pending home sales grew 2.4% in July from June, when they fell 1.4%. The consensus forecast promised moderate growth by 1.1%. (Event B on the chart.)

Crude oil inventories increased by 3.8 million barrels last week and are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 1.5 million barrels and are in the lower half of the average range. (Event C on the chart.)

EUR/USD for 2012-08-29

If you have any comments on the recent EUR/USD action, please reply using the form below.

2 Responses to “EUR/USD Down as Signs of Economic Growth in USA Trim Stimulus Bets”

  1. Peter Davies

    Good fundamental analysis of the pairs move following the release of the above data. Any opinion as to the direction of the EURUSD? On a pure technical standpoint, the pair has been trending down for quite some time now, however a look at the daily chart could signify some upward movement in the pair. We’ll just have to watch and see as trading progresses.

    Reply

    Jeff Reply:

    There is a bit of upward movement in the pair right now…I think it will continue as I think there will be no QE3 which will cause a little bit of chaos in the already weak US market. take a look at the e-mini s&p futures and you will see some massive divergence and a double top forming.

    Weaker USD will possibly mean some higher prices for the EURUSD, although we all know europe is not much better off either…FYI click my name to see the s&p 500 charts I spoke of

    Reply

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