By Russell Glaser
The euro was trading higher in morning trade and the buying increased after the release of better than expected German unemployment data. This afternoon traders are anticipating Canadian GDP data and US weekly unemployment claims.
Euro gains were strong in the morning hours following the release of the German unemployment change which showed the number of people out of work declined by -55,000 to 3.01M. Economists had forecasted a reduction of only -24,000. The report was also boosted by last month’s revision up to -54,000 from -52,000. The improving unemployment picture is surprising given the unstable month that passed as the geopolitical events in Africa and natural disaster in Japan did not deter German employers from adding to their payrolls.
Also boosting demand for the euro was higher than expected inflation numbers. The CPI Flash Estimate y/y was higher at 2.6% for the year. Economists had forecasted a 2.4% increase. The rising inflation numbers reinforces the market’s view for an ECB rate hike at its next meeting April 7th and should bring further bids to the euro.
At lunchtime during the European trading session the EUR/USD is higher at 1.4211 from 1.4131. The EUR/USD is currently approaching the 1.4250-1.4280 resistance level off of the March and November highs. Further resistance is found at the January 2010 high at 1.4580.
The EUR/JPY is trading near its daily high at 117.75 from 116.82. An initial target for the pair is 119.60.
The EUR/CHF is up at 1.3001 from 1.2969 with resistance at 1.3040.
This afternoon traders will be following Canadian GDP at 12:30. The CAD has performed nicely versus the dollar and is approaching the swing low on the daily chart at 0.9666 where multiple stops are located. Resistance is found at 0.9730.
US weekly unemployment claims will also be released at this time.
© 2006 by FxYard Ltd
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