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Yesterday was marked with key central bank monetary policy meeting in Europe. While the Bank of England left interest rates unchanged with little to no reaction, the focus was on the ECB. The markets went into the meeting with the expectations of some sort of QE announcement but were solely disappointed as the ECB’s opening statement indicated no change from last month’s statement.
The Euro staged a massive rally realizing that QE developments will be announced in Q1 of 2015. The Greenback was mixed during the day with the Dollar index hitting the multi-year resistance level with a second test of the resistance soon to come today.
The Eurozone Q3 final GDP estimates will be released today with no major shifts expected.
The US and Canada will be releasing their monthly jobs report with the US expected to see a solid job numbers report for the month of November. Although the initial weekly jobless claims have been fluctuating, the overall labor market activity in the US seems to have picked up steam with the Fed’s Beige book data showing an uptick in employment.
Fundamentals Recap – December 4, 2014
- Australia retail sales m/m rises above forecasts at 0.4%
- BoE rate unchanged at 0.5%
- ECB minimum bid rate unchanged at 0.05%
- ECB press conference
- US initial jobless claims 297k vs. 295k
- Canada Ivey PMI 56.9 vs. 8 estimates
Fundamentals – December 5, 2014
- Australia AIG construction index 45.4 down from 53.4 previously
- Japan October coincident indicator 104 vs. 104.1, and down from 105.6 previously
- German factory orders m/m to be soft at 0.5%; factory orders y/y to remain flat
- Eurozone GDPq/q final estimates 0.2%; GDP y/y 0.8%
- US nonfarm payrolls to rise 230k; unemployment rate to be unchanged at 5.8%
- Canada net employment change 5k; unemployment rate to rise to 6.6%
- US factory orders to be flat after last month’s decline of -0.6%
EURUSD Daily Pivots
Price did indeed rally back to test the broken support level for resistance. The price action confirms that while the levels of 1.24335 seem to have acted as a strong resistance, the break of the previous support and the current price action could make one to believe that the daily pivot level and the broken resistance at 1.237 could potentially now turn to support, which could likely result in ranging price action at least until the NFP is released. Downside support comes in at 1.23 which saw a major reversal yesterday, while a break above 1.24335 could target 1.24665.
USDJPY Daily Pivots
USDJPY continues to move higher briefly making intraday highs. The first rising trend line has been broken with a new trend line being established. However, there is no concrete evidence of any downside correction at this point, but the risks for a decline to 118.975 still remain unless the level of 120 is broken.
GBPUSD Daily Pivots
GBPUSD failed to capitalize on its gains this past week with the likelihood that a possible decline could be on the cards today. The minor falling resistance line seemed to have capped further rallies and a break of the rising support trend line and a potential retest could see GBPUSD reach the lower end of the ranging price action of 156117. A break of this level and a potential retest could see GBPUSD decline to new yearly lows.
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