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EUR/USD on fresh eight-month highs on ISM non-manufacturing report

dolar_euro_pound_yenThe euro advanced to a new eight-month high against the US dollar on trading Thursday, as the report on activity in the US non-manufacturing sector introduced disappointment.

EUR/USD climbed to a new session high at 1.3626 at 14:04 GMT, the pairs highest point since February 4th, after which consolidation followed at 1.3613, gaining 0.25% for the day. Support was likely to be found at October 2nd low, 1.3506, while resistance was to be met at February 4th high, 1.3658.

Earlier today the Institute for Supply Management (ISM) reported that its index, gauging business activity in the sector of services, unexpectedly fell to a reading of 54.4 in September from 58.6 in August. The median estimate by experts pointed a drop to 57.0. Values above the key level of 50.0 are usually a signal that activity in the sector has expanded. This data includes sectors, comprising about 90% of the US economy.

Additionally, the Department of Labor in the United States reported that the number of initial jobless claims rose by 1 000 to reach 308 000 during the week ending on September 28th 2013, while preliminary estimates pointed that claims will reach 315 000.

These reports came out amid uncertainty over the possible implications on US economic recovery after the partial US government shutdown. President Barack Obama held a meeting with Republican and Democratic leaders in Congress on Wednesday, although a final solution was still unlikely. House Republican leaders plan to bring up a measure to raise the debt ceiling as soon as next week. According to estimates by the US Treasury the debt limit will probably be reached by October 17th.

Meanwhile, in Europe, official data showed that retail sales in the euro zone climbed more than expected in August, gaining 0.7% on a monthly basis, while preliminary estimates pointed a 0.2% increase. July’s result was revised up to a 0.5% gain from a 0.1% gain previously. In June retail sales dropped 0.8%.

Elsewhere, the euro was slightly higher against the sterling, as EUR/GBP cross rose 0.07% on a daily basis to trade at 0.8428 at 14:46 GMT. EUR/JPY pair was also on positive territory, up by 0.24% to trade at 132.55 at 14:48 GMT.

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