EUR/USD on The Way To 1.43, Ahead of The G7�

Another day passed with more disappointing economic data out of the US, as the housing data printed much worse than expected numbers and left traders wondering exactly how bad things are for the American economy. The CPI data were in line with expectations, with the headline number slightly higher. The market reaction to this news was not that aggressive as the immediate sell off in the dollar was short lived with EUR/USD first jumping to 1.4235 but quickly retracing below 1.42. We see that market already knows that economic data in the housing sector will be bad after the credit crunch and therefore they stopped reacting aggressively to the news.

Today, we don�t have that many economic releases apart from jobless claims and Philly Fed later on this evening.

EUR/USD broke to the upside at the start of the European session, and took out stops being built above 1.4250, making fresh weekly highs at 1.4270. The move found sellers and the pair corrected back to 1.4230 in just a few minutes. Traders are clearly poised to see record highs at 1.4280 and even test 1.43.

The fact that this move occurs at times when G7 is only a day away, shows that the market is getting ready for some trading action tomorrow as it is Friday, last day of the week and there will be liquidation of positions ahead of the G7.

Yesterday we saw another sell off in all carry trades, with yen getting bid all across the board as risk aversion return in the markets. The move was quickly retraced though and yen currencies were stabilizing ahead of the Asia open.
It will be interesting to see how the US session will start today, and if traders will jump in the EUR/USD pair in order to revisit 1.4285.

There are so many rumors and speculations regarding the outcome of the meeting this weekend, so many feel that is wise to stay out of the market just in case that something happens and they get caught in the action. The thing is though, that if once again nothing happens and no currencies get mentioned, then we might see the euro strengthening much further and make another go at reaching 1,44-1.45 before consolidating.

There are basically two scenarios: either there will be talk about recent euro strength, or dollar weakness, or other scenario is that nothing is mentioned and views are mixed, therefore it will give the excuse to euro bulls to finish what they started: send the pair towards 1.45!

At the moment of writing, the EUR/USD is trading with buoyant tone, however in every attempt of new highs there are always willing sellers on the go�
From now till Friday close, watch out for any comments of various officials regarding �high levels� or �low levels� of currencies and especially our two beloved majors, the euro and the dollar!