US consumer confidence, housing data and Richmond Fed manufacturing were released and triggered a test of those earlier highs, at 1.2967. From 61.3 in August, consumer confidence in the US delivered by the Conference Board rose up to 70.3 in September, beating consensus of 63.0. The Richmond Fed manufacturing index is at its highest in four months, at +4 in September. After May's figure of +4, the manufacturing index dropped to -3 in June, to -17 in July, and -9 in August. For September, market consensus was pointing to -6. July housing price index in the US dropped to 0.2%, below the 0.3% consensus. In June, data was at 0.6% (revised from 0.7%)
The Draghi-Merkel meeting helped the ECB and the German leaders to discuss next steps. Draghi defended publicly the need of conditions in the OMT program to keep it credible for the markets, but that it doesn't solve the underlying debt crisis, and agreed with Merkel on the need for reforms.
“Loss of momentum, accompanied with negative hourly studies, keeps the downside favored, as 10/20 day EMA bearish crossover pressures”, wrote Windsor Brokers analyst Slobodan Drvenica, pointing to first target at 1.2864/54 (4h Ichimoku cloud base / 13 Sep low) and 1.2835 (50% of 1.2500/1.3170), ahead of 1.2826/00 (200 day MA / broken med-term bear-trendline off 1.3485 annual high). On the upside, resistance is at 1.2952 and 1.3000.