EUR/USD Edges Higher After Last Week’s Huge Slump

EUR/USD ticked up today following last week’s huge drop. It is not a surprise to see a correction after the currency pair has dropped so far so fast. The disappointing US housing data was not helping the dollar either. Yet it will take more than just a small correction for traders to believe that the euro is ready to regain strength.
New home sales were at the seasonally adjusted annual rate of 468k in September, below the median forecast of 546k and the negatively revised August’s rate of 529k (552k before the revision). (Event A on the chart.)
On Friday, a flash report on Markit manufacturing PMI was released, showing an increase from 53.1 to 54.0 in October. The actual data was not nearly close to the experts’ predictions of a drop to 52.8. (Not shown on the chart.)


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