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Forex - EUR/USD hits fresh daily high after U.S. new home sales tumble

Published 11/24/2010, 10:38 AM
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Investing.com – The euro extended gains against the U.S. dollar on Wednesday, rising to a fresh daily high after official data showed that new home sales in the U.S. unexpectedly tumbled by 8.1% in October.

EUR/USD hit 1.3421 during European afternoon trade, the daily high; the pair subsequently consolidated at 1.3415, gaining 0.35%.

The pair was likely to find support at 1.3285, the low of September 24 and resistance at 1.3565, the high of November 17.

Earlier in the day, the U.S. Census Bureau said new home sales fell to a seasonally adjusted 283,000 units in October, after rising to 307,000 units in September. Analysts had expected the number of new home sales to rise to 312,000 units in October.

Also Wednesday, the U.S. Census Bureau said core durable goods orders fell unexpectedly in October, dropping 2.7% after rising by a revised 1.3% in September. Analysts had expected core durable goods orders to rise by 0.4% in October.

Durable goods orders, which include transportation items, tumbled more-than-expected in October, falling 3.3% posting the biggest fall since January 2009 after rising by a revised 5.0% in September. Analysts had expected durable goods orders to decline by 0.3% in October.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell more-than-expected, declining to the lowest level since July 2008.

The euro was also up against the pound, with EUR/GBP climbing 0.28% to hit 0.8495.

Meanwhile, Irelands government said that it intended to save EUR15 billion between 2011 and 2014 – or about 4% of annual economic output – with EUR10 billion in public spending cuts and EUR5 billion in new taxes and revenues.

The plan set the stage for a bailout by the European Union and the International Monetary Fund, less than seven months after Greece required similar treatment.

Earlier Wednesday, data showed that German business confidence unexpectedly surged to the highest level since records for a reunified Germany began two decades ago, as domestic spending increased.

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