EUR/USD close to five-week highs

On Monday the euro traded in proximity to five-week highs against the US dollar, as investors focus was upon upcoming US pending home sales and the statements on monetary policy by the European Central Bank and the Federal Reserve.

EUR/USD hit a session high at 1.3291 at 3:08 GMT, the highest point since June 12th, after which consolidation followed at 1.3270. Support for the pair was expected at July 24th low, 1.3177, while resistance was to be encountered at June 12th high, 1.3359.

Mixed data was released from the United States during the last week. The Labor Department in the country stated on Thursday that initial jobless claims rose by 7 000 to reach 343 000 during the week ended on July 20th 2013. Results during the preceding week were revised up to 336 000 from 334 000 previously. On the other hand, on Friday the University of Michigan reported that US consumer confidence index rose to a six-year high in July, advancing to a reading of 85.1 from 83.9 in June, exceeding preliminary estimates of a value of 84.0. Uncertainty over the future of FEDs stimulus was growing.

In the mean time, the IFO index, gauging business climate in Germany increased slightly to 106.2 in July from 105.9 in June, standing above expectations of a reading of 106.1. Additionally, Euro zones composite Purchasing Managers’ Index (PMI) climbed to 50.4 in July from a reading of 48.7 in June.

Elsewhere, the euro was trading at a steady pace against the British pound, as EUR/GBP cross ticked down 0.02% to 0.8630 at 6:56 GMT. Today the United Kingdom was to show information, regarding Mortgage Approvals, Net Consumer Credit and Net Lending Secured on Dwellings. On the other hand, EUR/JPY pair slid by 0.35%, trading at 129.95 at 6:57 GMT.

Later on trading Monday the United States was expected to release a report on pending home sales, which is a vital indicator of future housing market activity. The average estimate pointed a drop by 1.0% in June, compared to May. Better than expected results could give support to the US dollar.