USD gains hoping for Inflationary GDP Numbers.

The US dollar traded significantly lower on the dovish Fed's Beige Book, but despite this there is still mixed feeling in the market as the report showed production activity appeared to be expanding at solid pace and labor markets in general were tight. I still believe that this report is just what Bernanke was looking for to confirm his own dovish view on rates. The report showed many local areas actually with slowing growth and we believe in his mind this will only get worse as we head into the fall and will then in return keep a damping factor on inflation. Also not to forget Bernanke main focus is to fight a slowing economy and not inflation. I still believe that whether we see a 25 bps point hike on August 8th we still believe that the following statement by the Fed chairman will leave the market with a strong sense of them putting rates on hault for now which should send EURUSD well above 1.3000 on a 3-months time.

However, the strong numbers coming out from Orders for U.S.-made durable goods rose more than forecast in June, pointing to momentum in manufacturing that's likely to keep the economy growing even as the housing market sputters. The 3.1 percent jump in orders followed a revised 0.3 percent gain the month before. But the sales of new homes in the US declined in June, the latest sign that the American housing market is cooling. The 3% drop from May was the first monthly fall in sales since February. The mixed data continued to push the dollar further down. But current as from the graph, the greenback managed to gain some ground as much as 70 pips from EUR/USD as it reaches 1.2771 early during the early New York Session. My trade was triggered a stop-loss with a huge profit of 110 pips with maximum leverage. I'll be looking forward to continue selling the dollar expecting the GDP index tomorrow for the second quarter to show negative USD data.