Forex Market: EUR/USD trims daily gains following upbeat US housing data

The 18-nation common currency pared daily gains against the US dollar on Friday, as greenbacks demand was heightened by better-than-expected US housing data.

EUR/USD hit a session high at 1.3825 at 12:20 GMT, after which the pair trimmed daily gains to trade little changed at 1.3790 at 14:36 GMT, losing 0.02% for the day. Support was likely to be found at April 9th low, 1.3780, while resistance was to be encountered at April 21st high, 1.3830.

Existing home sales in the U.S. rose to an annualized 4.59 million units pace in March, compared to analysts projections for a 4.55 million gain. In February compared to January the index of existing home sales dropped 0.4% to a level of 4.6 million. The sample of data encompasses condos, co-ops and single-family houses. Statistical data on existing home sales is often used along with statistical figures regarding the New home sales and Pending home sales, with the major objective being to draw a conclusion how nation’s housing sector is performing, regardless of interest rates. The most active house-purchasing period in the United States is usually between the months of March through June. The data added to signs that the recovery of the US housing sector is gaining traction.

Meanwhile, the preliminary consumer confidence in the euro zone improved to -8.7 in April, from -9.3 in the previous month, data by the European Commission showed today. Analysts had expected the index to reach – 9.2. The index of economic sentiment or economic confidence is an indicator that consists of five major components, reflecting the mood in various economic sectors. They are presented with different weights in the composite index, and are the following: industrial confidence, confidence in the services sector, consumer confidence, confidence in the construction sector and confidence in the sector of retail sales. Indices of different types of trust are seasonally adjusted balances, generated from the responses of a number of issues directly related to the sector.

Elsewhere, GBP/USD touched a session high at 1.6840 at 12:15 GMT, after which consolidation followed at 1.6819, adding 0.15% for the day. Support was likely to be received at April 21st low, 1.6784, while resistance was to be met at April 17th high, 16842, also the pairs strongest since November 2009.