Friday, 24 Sep 2010

Euro Surges on Positive German Economic Data

During the European trading session the euro was trading higher following the release of better than expected German Ifo Business Climate data. The yen was also stronger despite speculations that the Bank of Japan has once again intervened in the forex markets.

At the lunch hour in London, the EUR/USD was trading higher at 1.3405, up from an opening day price of 1.3343. The GBP/USD was also stronger at 1.5715, after starting the day at 1.5685. The USD/JPY was trading lower at 84.35, down from 84.53.

Spurring traders to add to their long euro positions was the release of better than expected German Ifo Business Climate data. The survey came in at 106.8. Economists had expected an outcome of only 106.3.

Earlier in the day the USD/JPY rose to a high of 85.38 following speculation that the Bank of Japan intervened in the FX market on behalf of the Japanese Ministry of Finance. However, but the middle of the European trading session the USD/JPY was trading below its opening day price.

The news events that will drive trading this afternoon are US durable goods orders at 12:30 GMT and US new home sales numbers that is due to be released at 14:00 GMT.

Traders should be eying further gains in the EUR/USD pair with the next target at 1.3510, the 50% retracement level from the December 2009 to June 2010 bearish trend.