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EUR/USD Sticks Head Up, Probing for Rally

May 25, 2016 by

EUR/USD was trading mostly in a range today with a slight downside bias. Yet just recently the currency pair moved to the upside sharply. The current trading session was light in terms of economic data from the United States. And without additional indications about probability of a June interest rate hike, it may be hard for the dollar to keep rising against its peers.

Flash Markit services PMI dropped to 51.2 in May from 52.8 in April, though it remained above the crucial 50.0 level of neutrality. Still, the growth of the sector was slowest in three months. The actual reading was far away from the optimistic forecast of an increase to 53.1. (Event A on the chart.)

Crude oil inventories dropped by 4.2 million barrels last week (though remained close to the historically high levels for this time of year) after rising 1.3 million the week before. Experts had predicted a much smaller drop by 1.7 million. Meanwhile, total motor gasoline inventories were up 2.0 million barrels. (Event B on the chart.)

EUR/USD as of 2016-05-25

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