Morning Fundamentals: EUR/USD Traded To A 7 Week High

EUR/USD traded to a 7 week high during the US session as the market has taken positively to the better than expected German Factory Orders report, that added fuel to the fire that the European Union has turned the corner on the short lived recession period that most economists thought that they were in. Euro opened the European session at 1.3260 with the data providing the kick that started the run towards breaking 1.3300.

However, it wasn’t until the early US morning that the momentum broke the level and since we have seen the price trade around the 1.3300 handle before closing just above. Is it time to get bulled up on the Euro with our belief that the Fed will not taper before the years end as the numbers are still to mixed and the key points to Bernanke are still missing the mark. Its one that could be better played in the crosses like AUD/EUR or even EUR/JPY. German Industrial Numbers are a must to watch tonight.

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AUD/USD was spooked during late afternoon trade by lower than expected Trade Balance data which should have helped lift the price. However, a mix of negative sentiment leading into the afternoon RBA announcement was enough for the price to dip towards 0.8900. Solid buying at the handle supported and after the release of only a 0.25% cut to the official interest rates to 2.50% the AUD broke higher. Catching out overly bearish shorts. The 0.9000 handle was now in play with a range of importers to spec guys seen on the offer.

The European and US session was a mix of 0.8950 and 0.9000 with the afternoon US session happy to close at 0.8980, despite Euro closing with a bid tone. Australian Home Loan data and RBA Assist Gov Debelle speaks. Some are calling for yesterdays cut to be the last but his expected comments are more of the watch and see. Positioning over the next couple of days will be difficult as bulls will try and get on board on the break of 0.9000 should it happen but watch out for the false break.

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