The US Dollar index managed to edge higher against the Yen and the Euro as the Greenback shrugged off a soft flash PMI reading.
The Euro saw a brief rally boosted by a better than expected German manufacturing, which managed to rise above the 50-level at 51.8 and back into the ‘expansion zone’. There was also some good news on Spanish employment figures which improved to 23.7%, down from 24.1%. The rally was however muted as the US trading session kicked in as the Euro soon reversed its intra-day gains.
The ECB will be announcing the results of the Eurozone bank stress tests on Sunday. Spain expects to see at least 10 banks fail the Asset Quality Review tests. Expect to see some reasonable gaps formed over the weekend on Euro crosses.
UK retail sales declined more than expected by -0.3% but the Sterling’s reaction was most muted in anticipation of today’s preliminary GDP figures for Q3. Estimates show that the UK’s GDP output would rise 0.7% after 0.9% growth in the previous quarter. A better than expected data is most likely to help push the Pound up higher against its peers.
Economic data is relatively light from the European as well as the US trading session with UK’s preliminary GDP being the only key event.
Fundamentals Recap – October 23, 2014
- New Zealand quarterly CPI increased lesser than expected by 0.3%
- Japan flash manufacturing PMI 52.8 v/s 52.1 consensus
- China HSBC flash manufacturing PMI 50.4 v/s 50.2
- French flash manufacturing PMI declines to 47.3, below expectations
- French flash services PMI soft at 48.1
- German flash manufacturing PMI rises to 51.8 above expectations
- Eurozone flash manufacturing PMI softly higher at 50.7
- Eurozone services PMI up 52.4
- UK Retail sales m/m declines -0.3%
- US flash manufacturing PMI lower to 56.2
Fundamentals – October 24, 2014
- Italian retail sales m/m to rise 0.2%
- UK Preliminary GDP q/q to be softer at 0.7%
- US New home sales data to see a decline to 473k
EURUSD Daily Pivots
The EURUSD closed as a doji yesterday, which could see price move either way with today’s candle most likely to show the direction for the long term. If the current support at 1.2636 holds, we could see further gains in the Euro, towards 1.2715. On the H1 charts, we see a consolidating bearish flag pattern underway which puts the possible decline towards the third support level at 1.255.
USDJPY Daily Pivots
USDJPY gained close to 0.8% yesterday and seems to be currently easing off the highs. Support comes in at 107.78 and 107.36 Price is still within the upward sloping channel, so any declines will likely be seen as a correction. The inverted head and shoulders patterns from the H4 charts see’s its final objective of 108.75.
GBPUSD Daily Pivots
GBPUSD looks to be forming a bearish flag/pennant continuation pattern with a possible downside move towards the region of 1.59; however a break of 1.6 psychological support is essential for the declines. To the upside, a break above 1.605 will see the cable likely rally towards 1.6128 levels.