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Mixed Reports Bring Volatility to EUR/USD

August 5, 2015 by

EUR/USD had been trading with a moderate bearish bias today before the US macroeconomic reports hit the market. Initially, it rallied following poor data on the employment situation in July. Then, it fell back to the daily lows when the unexpectedly good non-manufacturing PMI reports had been released.

ADP employment registered a monthly growth by 185k jobs in July. It was a major disappointment for the USD bulls following 237k gain in May and considering a median forecast of 215k. (Event A on the chart.)

US trade balance deficit rose to $43.8 billion in June — up from $40.9 billion of May (revised positively from $41.9 billion deficit). The deficit exceeded the analysts’ forecasts of $43.0 billion. (Event B on the chart.)

Markit services PMI rose to 55.7 in its final revision for July. The preliminary report showed only 55.2, which was still above June’s 54.8 reading. Market participants had expected the final report to show 55.2. (Event C on the chart.)

ISM services PMI soared from 56.0% to 60.3% in July — the highest reading since the introduction of the report in its current form in 2008. Traders were expecting only a moderate growth to 56.2%. The current value indicates that the US economy is growing at a significant pace. (Event D on the chart.)

Crude oil inventories decreased by 4.4 million barrels last week, following 4.2 million barrels drop a week earlier. Analysts predicted only a moderate decline by 1.3 million barrels. Meanwhile, total motor gasoline inventories increased by 0.8 million barrels and are in the middle of the average range for this time of year. (Event E on the chart.)

Yesterday, factory orders report has shown a growth by 1.8% in June — the same as forecasts had been. The growth followed a fall by 1.1% in May (revised down from 1.0% fall). (Not shown on the chart.)

EUR/USD as of 2015-08-05

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