EURUSD Bears Take a Brief Pause

United States (US) manufacturers received 0.2 percent more orders ($0.3 billion) month over month in April 2012 following a 3.7 percent dip over the month before, according to the US Census Bureau on Thursday. Yet, excluding transportation, the sector receiving most of the increase ($1.3 billion), new orders decreased 0.6 percent in April.

Furthermore the country’s shipments of manufactured durable goods rose 0.7 percent ($1.5 billion) with transportation equipment shipping the most, up 3.1 percent ($1.9 billion). The country’s manufacturer unfilled orders lowered 0.1 percent with inventories increasing 0.3 percent ($1.1 billion) to $364.1 billion, the highest level since the series was first published on a NAICS basis in 1992.

New nondefense orders for capital goods dipped 0.2 percent ($0.1 billion) in April. Shipments for capital goods lost $0.3 billion or 0.5 percent while unfilled orders moved up 0.1 percent ($0.4 billion) and inventories added $1.3 billion (0.8 percent).

In another report, US unemployment initial insurance claims for the week ending May 19th lowered a seasonally adjusted 2,000 to 370,000, according to data released by the US Department of Labor on Thursday. Additionally, the less volatile four week moving average dropped 5,500 to 370,000 also. The advance insured unemployment rate for the week ending may 12 was 2.6 percent, unchanging from the previous week’s revised rater. Furthermore, the number for seasonally adjusted insured unemployment during the same week came to 3,260,000, dropping 29,000 from the revised level the week before.

The EURUSD paused briefly at its 22 month low as U.S. economic reports were worse than expected. The EURUSD remains severely exposed to further downside. However we have fairly strong support near the 23.6% Fibonacci retracement levels near 1.2550. If the pair closes below 1.2550 by the end of the week, we expect the EURUSD to target 1.2400. 

Eugene Ross, Analyst

Admiral Markets

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