EUR/USD - 1.0432
Despite euro's selloff to a 2-week bottom at 1.0367 in New York Friday, subsequent strong short-covering rise to 1.0462 in Europe yesterday suggests choppy trading above May's 5-year trough at 1.0350 would continue and range trading is seen before prospect of another fall but below 1.0350/60 needed to extend to 1.0320/30.
On the upside, only a daily close above 1.0462 would risk stronger retracement towards 1.0488, break, 1.0505/10.
Data to be released on Tuesday
New Zealand business confidence, Australia AIG construction index, services PMI, RBA interest rate decision, Japan Jibun Bank manufacturing PMI, China Caixin manufacturing PMI,
France industrial output, SnP global services PMI, Italy SnP global services PMI, Germany SnP global services PMI, EU SnP global services PMI, UK SnP global services PMI.
Canada building permits, US durables ex-defense, durable goods, factory orders and durables ex-transport.
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Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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