FOREX Watch: Euro probes 1.33 after rebound
The euro soared to a session high of 1.3325 in the North American trade before moving closer to 1.33, as the markets weigh the future of Federal Reserve monetary policy. Market participants glancing at the economic calendar were surprised to learn US jobless claims declined to 292,000 last week, the lowest level since March 2006. However, a closer look at the fine print revealed the drop in claims was attributable to computer network upgrades in two US states, causing them to underreport.
The euro was trading at a loss of more than 0.2 percent in the European session after data on factory production fell below estimates. Industrial production declined 1.5 percent in July, after a gain of half a percent the previous month. Production was down in all five industry clusters, led by capital goods, which declined 2.6 percent. Capital good reported gains of 2 percent in June. Durable consumer goods were down 2.2 percent in July after a gain of 4.3 percent the previous month. Factory production in Germany and France, the currency bloc’s largest members, declined 2.3 percent and 0.6 percent, respectively.
The euro has advanced 1.4 percent against the greenback over the previous five days on the heels of improving investor confidence in the Eurozone and waning risk aversion. Investors have entered the markets more confidently following Russia’s diplomatic handling of Syria’s chemical weapons situation. The US dollar has lost some of its edge now that direct military confrontation with the Arab Republic has diminished, at least for the time being.
The EURUSD is trading at 1.3303 in the New York trade. The market has entered into a bullish phase, with the next resistance situated at 1.3392. On the downside, initial support is located at 1.3277. The 20-day moving average for the pair is 1.3289. The 50-day moving average is 1.3216.
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