Majors Retrace after Freefall

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Majors Retrace after Freefall
Majors Retrace after Freefall

Majors Retrace after Freefall

As stated earlier in our weekly outlook report, that the major currency pairs had their bullish correction due, so cheers to those traders who went long on these pairs today where the euro gained by more than 25 points today and is currently hovering at its resistance level at 1.3521 breaking of which could take it to 1.3568 resistance level.

Even though the economic indicators including the Italian and Spanish manufacturing PMI didn’t meet the expected numbers, the euro gained against the U.S. dollar and followed its technical move on a Fibonacci retracement scale.

Pound up on Construction Data

On the other hand, the construction sector in the U.K. economy showed a significant improvement in the past month where the construction PMI level increased from 58.9 to 59.4 level, showing healthy progress in terms of construction and development in the country.

The British pound is trading at 1.5973 just before the start of the U.S. session on Monday where it gained nearly 50 points today since the investors took the construction PMI data as a positive sign. This move could possibly be extended provided that the services sector data of the U.K. economy surpasses the expected numbers because it constitutes to more than at least 40% of the overall economy. However, the technical levels say that the bears would still remain in control provided that the pair remains below 1.6063 resistance level.

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Aussie Boosted by Retail Sales

The retail sales in the Australian economy boosted up by 0.8% in the past month from its previously recorded figure of 0.5%, hence giving the investors a sound reason to long the pair earlier in the Asian session today. We need to keep in mind that the Aussie has stayed firm and, but it would also be a bounty for sellers if it sustains below the strong resistance area of 0.9566.

Looking forward to?

The important fundamentals which the investors are eying on are the interest rate data for the Aussie, services PMI for the U.K. economy, and the non-manufacturing PMI of the U.S. economy, all due tomorrow.

Good volatility would be seen in the British pound in the European session, whereas if the cash rate of Australia is changed then the Aussie could move sharply depending on how the investors take the change in the interest rate.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com