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Forex: EUR/USD erasing daily gains after US optimism

FXstreet.com (Barcelona) - The publication of a disappointing US economic optimism by IBD/TIPP has triggered the retracement of the gains made during the European morning in reaction to an upside surprise in German factory orders. The EUR/USD gains from 1.3070 area to 1.3132 high are now being erased, currently to 1.3087.

Economic optimism in the US disappointed the market by easing from 46.2 to 45.1 in May, instead of rising to 47.1 as market consensus.

German factory orders figures came in up by 2.2% in March, instead of contracting -0.5% as expected. February data was revised slightly lower from 2.3% to 2.2%. German factory orders in year-on-year basis dropped further, from -0.2% (revised from 0.0%) to -0.4%, but that came in better than the -2.9% expected. Details showed broad-based gains from the domestic side (+1.8%), as well as exports (ex-Germany EZ orders +4.2% and non-EZ orders +1.9%). Earlier, the French industrial output not only contracted as predicted, but fell by -0.9% instead of the market consensus of -0.3%.

UBS analysts are neutral: “Initial support is at 1.3033, a break below this would expose 1.2995 and then 1.2936”, wrote analyst Gareth Berry, pointing to resistance at 1.3159 ahead of 1.3243.

US: IBD/TIPP Economic Optimism eases to 45.1 in May

Economic optimism in the US disappointed the market by easing from 46.2 to 45.1 in May, instead of rising to 47.1 as market consensus.
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