EUR/USD swings higher near 1.0640, US ISM in focus
The EUR/USD pair found renewed bids just ahead of 1.06 handle, and from there climbed back higher to hit fresh daily highs amid upbeat Eurozone PMIs and negative European stocks.Currently, EUR/USD jumps +0.35% to 1.0630, having posted fresh session highs at 1.0636 some minutes ago. The main currency pair regained poise and swung higher, as the euro received fresh impetus from upbeat Euro area final manufacturing PMI reports and composite jobs data.Additionally, negative performance seen around the European equities, in wake of Italian referendum jitters also boosted demand for the funding currency euro. While the greenback remains broadly lower, correcting yesterday’s sharp gains backed by OPEC deal-led risk-on rally across the financial markets,All eyes now remain on the main risk event for today, the ISM manufacturing PMI report, due on the cards later in the NA session. While markets await the US payrolls data due tomorrow for next direction on the major.In terms of technicals, the pair finds the immediate resistance 1.0657/69 (Nov 29 & 30 high). A break beyond the last, doors will open for a test of 1.0685 (weekly high) and from there to 1.0700 (round figure). On the flip side, the immediate support is placed at 1.0603 (10-DMA/ session low) below which 1.0561 (Nov 28 low) and 1.0535 (Nov 25 low) could be tested.
GBP/USD powers through 1.2600 handle, jumps to three-week highs
The GBP/USD pair shrugged-off disappointing UK manufacturing PMI and powered through 1.2600 handle to hit a three week high. Currently trading comfortably above 1.2600 handle, around mid-1.2600s, the pair caught fresh bids after comments from UK Brexit minister David Davis receded fears of a 'hard Brexit'. Davis said that UK might consider EU budget payments, if required, in order to have full access to EU markets and negated an unexpected drop in UK manufacturing activity. In fact, the Markit UK manufacturing PMI fell to 53.4 in November, down from 54.2 recorded in October. Consensus estimates were pointing to a rise to 54.5. Meanwhile, extension of the greenback's near-term consolidation phase, as investors cautiously await for Friday's monthly jobs report (NFP), is further supportive of the pair's strong up-move on Thursday. Moreover, possibilities of stops getting triggered on a decisive move might have also contributed to the pair’s sharp up-surge in the past hour. Later during NA session, weekly jobless claims and ISM manufacturing PMI from the US would now be looked upon for some respite for the US Dollar and eventually provide some impetus for the major. From current levels, Nov. monthly high near 1.2675 area is likely to act as immediate hurdle before the pair darts towards its next resistance near 1.2700 round figure mark. On the downside, 1.2600 handle now becomes immediate support to defend, which if broken is likely to drag the pair back towards 1.2500 psychological mark.
USDJPY: Waiting for a dip to 106.50/107.50 to buy - Westpac
Robert Rennie, Research Analyst at Westpac, notes that today’s BoJ data on domestically licensed banks is an important reminder of why the central bank has had almost no choice but to move to a soft taper.“Govt debt to total assets ratio fell to just 8% in November, a level we have not seen since the late 1990s. Banks are clearly running short of the HQLA they require. As this becomes more obvious to the market, then we expect the pace of ¥ depreciation to slow.”“However, buyers of USD/JPY are focused on the dollar leg with higher US yields and inflation expectations the key driver. We thus remain reluctant buyers, waiting for a dip to 106.50/107.50.”“Despite the month end data being largely behind us, we still have a reasonable week ahead in Japan with labor cash earnings data on Tuesday and revised GDP, the eco watchers survey and balance of payments data on Thursday. After today’s CAPEX data, it looks like we may see a very modest upward revision from the 0.5%q/q print next week.”
USD/CAD back above 1.3400, still mildly weaker ahead of US ISM PMI
Having posted a session low at 1.3378, the USD/CAD pair managed to recover majority of its early lost ground to move back above 1.3400 handle ahead of US economic data. Currently trading around 1.3420 region, the pair extended its near-term range-bound price-action and has ignored OPEC deal-led prevalent upbeat sentiment surrounding crude oil, which tends to benefit the commodity-linked currency - Loonie. In fact, WTI crude oil added on to Wednesday's strong gains and traded with gains of over 1.0%, hovering around $50.0/barrel psychological mark.Also on Wednesday, the pair did break below 1.3400 handle after the oil cartel announced first agreement in eight years to cut its crude oil production, which was further supported by better-than-expected Canadian GDP print. The weakness, however, turned short-lived as rallying crude oil prices added to US inflation expectations, which has been already boosted by prospects of aggressive fiscal spending under Trump administration, and fueled speculations of higher US interest rates. Moreover, Wednesday's upbeat ADP report further boosted investor confidence of stronger US economic growth in 2017 and was supportive of renewed greenback demand. On the economic data front, the weekly jobless claims, ISM manufacturing PMI from the US, accompanied by RBC's Canadian manufacturing PMI will be in focus during early NA session on Thursday. Immediate upside resistance is pegged near 1.3435-40 region (session peak) above which the pair seems dart towards 1.3480 (Nov. 29 high) en-route 1.3500 psychological mark. On the downside, 1.3400 handle now seems to act as immediate support, which if broken might continue to find support near 1.3380 level (session low) ahead of 1.3456 level (yesterday's three-week low).
EUR/GBP sinks to 3-month lows near 0.8400
The solid performance of the Sterling is dragging EUR/GBP to test fresh multi-month lows in the 0.8400 neighbourhood.The European cross has come under renewed and strong selling pressure today following a solid demand for the British Pound, particularly via a higher GBP/JPY and after shorts continue to be triggered above 1.2600 the fIgure in GBP/USD.EUR/GBP is retreating for the fifth consecutive session so far after breaking below the multi-week consolidative pattern around the psychological 0.9000 handle seen in late October, all in response to the rejection from highs post-‘flash crash’ near 0.9400 the figure.In the data space, UK’s manufacturing PMI has missed consensus during November, while PMIs in Euroland have come in mixed during the same period and the unemployment rate in the region ticked lower to 9.8% in October. The cross is now losing 0.56% at 0.8421 and a breakdown of 0.8329 (low Sep.6) would expose 0.8277 (200-day sma) and then 0.8248 (low Jul.14). On the flip side, the immediate hurdle lines up at 0.8582 (high Nov.30) ahead of 0.8610 (20-day sma) and finally 0.8710 (high Nov.15)
NZD/USD neutral outlook stays unchanged UOB
NZD/USD is expected to remain within a 0.7000/0.7150 range in the next weeks, suggested FX Strategists at UOB Group.“While the major 0.7190 resistance capped as expected, the sharp drop from the high of 0.7170 was surprising. The down-move appears to be running ahead of itself but another leg lower to test 0.7050 support seems likely”. “While NZD rallied strongly yesterday and touched a high of 0.7170, it surrendered most of its gains by end of the day. As noted, only a daily closing above 0.7150 would shift the outlook for NZD to bullish and this has clearly not happened. To put it another way, the outlook for NZD remains neutral for now and we are back into a 0.7000/0.7150 sideways trading range.
Gold aiming back towards multi-month lows ahead of US ISM PMI
Gold ran through fresh offers and is now heading back to nearly 10-month low touched during early Asian session.Currently trading around $1168 level, resurgent US Dollar buying interest was seen restricting the metal's recovery witnessed during early European session. However, softer tone surrounding European equity markets has been supportive for traditional safe-haven assets and is assisting the precious metal to defend multi-month lows for the time being. Later during NA session, US economic releases that include - weekly jobless claims and ISM manufacturing PMI, would be looked upon for short-term momentum play. While the broader trend would remain dependent on Friday's closely watched NFP data, which would help investors determine the next leg of directional move for the greenback and eventually drive dollar-denominated commodities - like gold. From current levels, $1162 (multi-month low) might continue to protect immediate downside, which if broken is likely to accelerate the slide further towards its next important support near $1152-50 region. On the upside, momentum back above $1175 might now trigger an immediate short-covering rally towards $1183-84 horizontal resistance ahead of $1194-95 strong hurdle.
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