EUR/USD on seven-week highs

The euro was trading close to seven-week highs against the US dollar on Thursday, as uncertainty over the future of FEDs Quantitative Easing still pressured the greenback.

EUR/USD reached its highest point for todays trade at 1.3352 at 5:43 GMT, also the pairs highest since June 19th, after which consolidation followed at 1.3339. Support was expected at August 7th low, 1.3264, while resistance was to be encountered at psychological 1.3400 level.

US dollar came under pressure, as recent economic data from the United States fueled the uncertainty over the future of Federal Reserve’s monthly asset purchases. Chicago Federal Reserve Bank Chairman Charles Evans said that he would not rule out the withdrawal of central bank’s stimulus measures at the bank’s meeting in September. This way he echoed the remarks made by Dennis Lockhart, the president of the Federal Reserve for Atlanta on Tuesday.

In the mean time, the common currency was strongly supported, after the release of sound data out of Germany on Wednesday, regarding the index of industrial production. It showed that the index advanced significantly more than estimates in June, by 2.4% instead of 0.3%, while in May production fell by 0.8%, according to revised data. In annual terms, industrial production grew by 2.0% in June, confounding expectations of a 0.3% decrease. It was likely that German industry has overcome the period of weakness, while recent confidence indicators also spoke of improving conditions. It is expected that Germanys Gross Domestic Product will advance more than 2.0% during the second quarter of the year on annual basis.

In addition, earlier on Thursday a report said that German trade balance registered a wider surplus than projected in the month of June, amounting to 16.9 billion EUR, compared to the expected 15.0 billion EUR. Surplus, recorded during the preceding month was revised up to 13.6 billion EUR from 13.1 billion EUR previously. The seasonally adjusted trade balance also showed a larger surplus in June, 15.7 billion EUR compared to expectations of a figure of 15.2 billion EUR, following the revised up surplus of 14.6 billion EUR during May. German export recovered in June, after the sharp decline in May, but however, foreign trade remained obstructed by low demand in other Euro zone countries. Export, the driving force of German economy, dropped by 0.6% during the period between January and June 2013 compared to the same period last year, while deliveries towards other Euro zone members decreased by 3.1%. Import figure dropped for the first time in four months in June.

Elsewhere, the euro was trading slightly higher against the British pound, as EUR/GBP cross ticked up 0.06% to 0.8616 at 7:05 GMT. EUR/JPY pair was also gaining today, up by 0.08% to trade at 128.59 at 7:05 GMT.