The business activity in the Euro area rose a bit in August as slight improvement within the territory of economic expansion was seen in the common monetary area largest countries of Germany and France. The manufacturing purchasing managers' index, which is closely watched by economic policymakers in the single currency area, hit 53.3 this month that was slightly up from 53.2 in July. The bright headline figure belied a slowing in the growth of manufacturers' order books and a lower rate of new hires on the back of a drop in optimism in the region's dominant services sector. A reading below 50.0 signals a decline in activity, and a reading above that level indicates an expansion. Economists had estimated that the PMI fell to 53.0. Official figures show the Euro zone economy slowed in the three months to June, having accelerated in the first quarter. The PMI's suggest the economy is on track to grow at a similar pace in the third quarter, although with a greater contribution from France, which saw output stagnate in the three months to June. The national PMI for the Euro zone's second-largest member recorded an unexpected jump in August, rising to a 10-month high of 51.6 from 50.1 in July.
New home sales in the United States rose more than expected in July, official data showed on Tuesday. According to the Department of Commerce, new home sales increased 12.4% to a seasonally adjusted annual rate of 654,000 in the seventh month of the year, reaching the highest level since October 2007. Meanwhile, the preceding month's reading was revised down to 582,000 from the originally reported 592,000 units. Market analysts penciled in a slight deceleration to 575,000 units in the reported month. July's surge probably exaggerates the housing market strength, as new single-family home sales are extremely volatile month-to-month; still, they were 31.3% higher than a year ago. The data also showed that new single family home sales jumped 40.0% in the American Northeast, as well as grew 1.2% in the Midwest region. Sales in the South rose 18.1% to their best level since July 2007, whereas the West region remained flat last month. Furthermore, inventories of new homes for sale dropped 2.9% to 233,000 units in July, the lowest level since November 2015. The median price of a new single-family home fell 0.5% year-over-year to $294,600. The US Dollar rose slightly after the release, trading at 1.1326 against the Euro, 100.11 against the Japanese Yen and 1.3186 against the British Pound.
Upcoming fundamentals: US existing housing data
On early Wednesday morning the Germans already got up early and published their GDP data, which was exactly as forecasted a growth of 0.4%. During the rest of the day traders can take a look at the US Home Price Index monthly change for June at 13:00 GMT and the US Existing Home Sales data for July, which will be available at 14:00 GMT in nominal numbers and a monthly change in percentage.
EUR/USD breaks out of pattern on Wednesday
Daily chart: The common European currency had been trading against the US Dollar in a channel upward pattern since July 4, and the pair broke out of the pattern on early Wednesday morning. The currency exchange rate reached the monthly R2 at 1.1353 on Tuesday, as it was forecasted. However, the rate bounced off the monthly R2 and began a decline. At the moment, it is most likely that the currency pair will continue to fall until it reaches the weekly PP at 1.1281 and monthly R1 at 1.1263, which will provide support.Trader sentiment stagnates on Wednesday
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade at 1.1050 in November
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between July 24 and August 24 expect, on average, the currency pair around 1.1050 by the end of October. Though 49% (-2%) of participants believe the exchange rate will be generally below 1.10 in ninety days, with 26% (-2%) alone seeing it below 1.06. Alongside, 37% (+2%) of those surveyed reckon the price will trade in the range between 1.10 and 1.18 in three months.