Forexpros – The euro reversed losses against the dollar but traded jumpily Thursday as the market worried if a European Union summit will do little to stem the spread of the debt crisis, while new U.S. housing numbers surprised on the upside, fueling demand for the greenback.
In Asian trading on Thursday, EUR/USD was trading up 0.03% at 1.2473, up from a session low of 1.2468, and off from a high of 1.2475.
The pair was likely to find support at 1.2442, the low from June 26, and resistance at 1.2508, the high from June 27.
A European Union summit is set to open yet fears persist that like last meetings, participants will agree on the direction to get out of the debt crisis but less on the tools needed to drive out of it.
Meanwhile, borrowing costs remain high in periphery countries on fears that Greece may exit the currency union and pressure Spain and others to follow suit.
Italy sold EUR9 billion in six-month government bonds at an average yield of 2.95%, up from 2.10% at an auction in May.
Yields have soared in Spanish auctions lately, recently topping 7%, a level deemed unsustainable by the markets.
In the U.S. strong housing data bolstered the dollar before it cooled its gains amid some early-session profit taking.
The National Association of Realtors reported that pending home sales jumped 5.9% in May, far above market calls for a 1% increase and matching a two-year high hit in March.
Earlier this week in the U.S., the Standard & Poor’s-Case-Shiller home price index fell at an annualized rate of 1.9% in April, better than expectations for a 2.5% drop.
Also in the U.S. orders for durable goods rose by a seasonally adjusted 1.1% in May, outpacing expectations for a 0.4% gain.
However, core durable goods orders, which are stripped of transportation items, rose by a seasonally adjusted 0.4% in May, below market forecasts for a 0.7% gain.
The euro, meanwhile, was up slightly against the pound and down against the yen, with EUR/GBP up 0.02% at 0.8010 and EUR/JPY trading flat at 99.40.
Markets will move on comments out of the European Union summit on Thursday and on Friday.
Meanwhile, Germany is to release unemployment data later Thursday.
The U.S. will release weekly initial jobless claims figures followed by revised data on first quarter economic growth.
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