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Forex: EUR/USD stays above 1.3080 after US housing

FXstreet.com (Barcelona) - Profit taking from 1.3116 high followed the release of German CPI and the EUR/USD eventually returned to 1.3080 area, where it was able to consolidate its gains during the European morning. US data is being published (US pending home sales just now) and investors are only waiting for Dallas Fed manufacturing business now.

The National Association of Realtors indicated that US pending home sales beat market consensus at 1.5% (MoM) in March, instead of the 1.0% expected. Annualized data came in at 7.0%, above 6.1% consensus but not as high as last year’s figure of 8.4%.

US Core income disappointed at 0.2% in March, instead of 0.4%, and spending rose 0.2%, instead of 0.0% expected. The price of personal consumption expenditures fell -0.1% (MoM) to an annualized drop from 1.3% to 1.0%, as expected. Core prices came in at 0.0% (MoM) to an annualized drop from 1.3% to 1.1%, below consensus of 0.1% and 1.2%, respectively.

This week is will have the FOMC and ECB meetings, as well as the US NFP report, which will attract market attention. Risk sentiment is higher today after news of a coalition government in Italy and labor cuts in Greece that allow the next tranche of bailout funds to be distributed.

“In the 4 hours chart there’s a slightly bullish tone as indicators head higher above their midlines, yet holding near their midlines, reflecting not much buying interest around”, wrote FXstreet.com independent analyst Valeria Bednarik. “A break above 1.3115 should signal an upward continuation up to 1.3050 price zone, probable top for today, while a retracement back below 1.3070 will likely see the pair addressing back towards the 1.3010/40 price zone”, she added.

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