Forex: EUR/USD dives after US manufacturing

FXstreet.com (Barcelona) - The Philly Fed manufacturing survey took everyone by surprise by jumping from -10.7 to +8.1 in December when market consensus was indicating -3.0. In reaction, the greenback became a buying target for investors who provoked a EUR/USD selloff that found its low at 1.3238.

Also recently released was November Existing Home Sales indicator, that rose from 4.76M (revised from 4.79M) to 5.04M, coming in 5.9% higher and beating the 1.3% consensus. Earlier, the economic calendar published an annualized US GDP Q3 that rose from 2.7% to 3.1%, beating the consensus of 2.8%. The US initial jobless claims (Dec-15) jumped from 344K to 361K, disappointing market expectations of 357K. Personal consumption expenditures stayed unchanged at 1.1%, as well as its prices, at 1.6%. The US CB Leading Indicator dropped -0.2%, as expected in November.

Coming from Europe was the EMU consumer confidence for December released by the European Commission and indicating an improvement from -26.90 to -26.6, beating consenus of -26.85.

“We still expect a phase of weakness in the next few weeks given the general overbought conditions”, wrote MIG Bank analyst Bijoy Kar, admitting that the recent new high above the strong resistance at 1.3172 suggests an improvement of the underlying trend, while strong resistance is at 1.3487 (24/02/2012 high).

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