Richard Perry
Independent Analyst
EUR/USD
The euro has settled into a holding pattern ahead of the ECB meeting today. With a slide back to leave resistance at $1.1165/$1.1180, EUR/USD has unwound within the recent recovery trend. We have been discussing the importance of the market finding another higher low between $1.1075/$1.1100 and it was interesting to see yesterday’s low a shade above $1.1100. The support of a three week uptrend comes in at $1.1075 today to add to this confluence. Momentum remains strongly configured for little corrections to now be seen as an opportunity for the bulls rather than a threat. RSI is holding above 60, MACD lines rise above neutral and Stochastics are around 80. Getting past the ECB meeting today with these levels intact would be a real sign of more stable ground for the recovery. Above $1.1180 opens $1.1250.
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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.
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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.
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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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