This past week was just another glimpse of what the greenback does when the year-end becomes near – beat the major pairs. Yes, the U.S. dollar gained its strength this past week where the euro along with the British Pound and Australian dollar all plunged significantly as they closed below the critical support levels on Monday.
The Capacity Utilization rate along with the industrial production of the U.S economy improved sharply in October but the retail sales and the purchasing power index couldn’t show much improvement as compared to their previously recorded figures. Plus the ISM Manufacturing PMI and the Chicago PMI indicators showed relatively healthier economic activity in the manufacturing sector that led to the gaining of investor confidence in the U.S. dollar.
On the other hand, the Eurozone unemployment rate remained at peak level of 12.2% with no signs of recovery yet, plus the German retail sales and the German consumer climate dropped against the previously recorded figure and the expected numbers.
The U.K. economic indicators showed negative signs where the CBI realized sales along with the Net lending to individuals couldn’t meet the expected figures hence allowing the bears to take control of the pair.
In short, the euro lost nearly 330 points in one week and is now trading just above its October’s support level at 1.3475 whereas the British pound also lost more than 300 points where bears have a firm control over the pair as long as the pair does not move above 1.6080 critical resistance level.
The Australian dollar slumped but relatively lower as compared to the euro and pound, but the Aussie is so looking forward to some good positive outcomes from its fundamentals this coming week where it may take some bounce back but unless the pair moves and sustains above 0.9565 level, the opportunity for the sellers would still remain there.
The bullish correction for all these pairs is due this week where they may gain at least 40 to 60 points to cover their 38.2% Fibonacci retracement on the retracement scale, but the overall outlook is still bearish for all these three pairs.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org