EUR/USD dips to lows near 1.0380 ahead of US ISM
The buying interest around the buck is now putting EUR/USD under further downside pressure, currently testing the area of daily lows in the 1.0385/80 band.Spot is losing further ground during the first half of the week amidst a strong performance of the buck, at the same time leaving the door open for a potential visit to 14-year lows in the mid-1.0300s seen on December 20.EUR paid little attention to the earlier release of the advanced German inflation figures, coming in higher than expectations during December. Previously, German unemployment decreased by 17K during the same period while the jobless rate stayed put at 6%.Furthermore, and according to the latest CFTC report, EUR speculative net shorts have been trimmed to levels last seen in late June 2016 during the week ended on December 27.On the US data front, the manufacturing sector will take centre stage later in the session in light of the gauges by Markit and the ISM for the month of December.The pair is now losing 0.64% at 1.0388 facing the next support at 1.0369 (low Dec.28) ahead of 1.0350 (2016 low Dec.20) and finally 1.000 (psychological level). On the other hand, a breakout of 1.0534 (high Jan.2) would target 1.0654 (spike Dec.30) en route to 1.0690 (55-day sma).
GBP/USD struggling to clear 1.2300 barrier, US ISM in focus
The GBP/USD pair was seen struggling to build on upbeat UK manufacturing PMI-led bullish momentum, albeit has managed to hold with marginal gains for the day. Currently hovering around 1.2280 region, a surprisingly stronger-than-expected UK manufacturing PMI print for December assisted the pair's recovery from session low level near mid-1.2200s. In fact, Markit's UK manufacturing PMI for December jumped to 30-month highs and came-in at 56.1, as compared to 53.0 expected and 53.4 recorded in November. Today's upbeat manufacturing data eased some concerns of 'hard Brexit' and attracted some buying interest around the British Pound. The pair's recovery, however, lacked momentum and remained capped below session peak level of 1.2307 amid resurgent greenback strength across the board, with the overall US Dollar Index heading back towards 14-year highs touched in December. Later during NY session, the US ISM manufacturing PMI might provide some impetus for short-term traders. However, a slew of important macro releases during the course of current trading week, scheduled at the beginning of a new month, would help investors determine the next leg of directional move for the major. A follow through momentum above 1.2300 handle is likely to confront resistance near 1.2335-40 region, which if cleared might trigger a short-covering rally towards 1.2400 handle, en-route 50-day SMA strong resistance near 1.2425 region. On the downside, renewed weakness below session low support near 1.2250-45 region is likely to accelerate the slide towards 1.2200 handle before dropping further towards its next major support near 1.2130-25 region.
USD/JPY hits two-week high ahead of US manufacturing PMI
The USD/JPY pair maintained strong bid tone and was seen building on to its momentum back above 118.00 handle.Currently trading around 118.30-35 band, testing session peaks, Tuesday's strong up-move helped the pair to reverse all of its losses recorded in the past two-weeks amid renewed strong greenback buying interest. Expectations for a faster Fed rate-tightening cycle and faster US economic growth in wake of aggressive fiscal spending under the incoming Trump administration continues to underpin the greenback. In fact, the overall US Dollar Index resumed with its strong bullish trajectory and has now moved within striking distance of 14-year highs touched in December. Meanwhile, a mildly positive sentiment surrounding European equity markets provided little support to the Japanese Yen's safe-haven appeal and further collaborated to the pair's strong bid tone. Moreover, possibilities of stops getting triggered, on a sustained move above 118.00 handle might have also contributed to the pair's up-surge to the highest level since Dec. 16.Next on tap would be the US ISM manufacturing PMI print for December, which if matches expectation (53.5), as compared to November's 53.2, would reinforce market expectations and continue boosting the pair further during NA session. A follow through buying interest above 118.43 (Dec. 16 high) is likely to boost the pair towards multi-month highs resistance near 118.66 touched on Dec. 15, en-route 119.00 round figure mark. On the downside, 118.00 handle now becomes immediate support, which if broken might drag the pair back towards 117.50 horizontal support and the corrective slide could further get extended back towards 117.00 round figure mark.
USD/CHF reclaims 1.0300 handle ahead of US ISM PMI
The greenback extended its bullish trajectory, helping the USD/CHF pair to reverse over 175-pips from Friday's swing low and reclaim 1.0300 handle.Currently trading around 1.0310 region, the pair caught fresh bids on Tuesday amid strong greenback buying interest across the board. Growing expectations that President-elect Donald Trump's proposed fiscal spending would lead to a faster US economic growth is underpinning demand for the US currency and lifted the key US Dollar Index to the highest level since December 2002. Moreover, the prevalent risk-on mood, as depicted by positive sentiment surrounding equity markets, is further denting the Swiss Franc's safe-haven demand and collaborating to the pair's strong bid tone on Tuesday. Next in focus would be the US ISM manufacturing PMI, which is expected to tick higher for December and might attract a fresh wave of US Dollar buying interest during NY trading session.Immediate resistance on the upside is pegged near 1.0321 (Dec. 28 high) above which the pair is likely to aim back towards multi-year highs resistance near 1.0344 (Dec. 15 high). A convincing move above 1.0345 resistance the pair seems all set to head towards reclaiming 1.0400 handle. On the downside, 1.0285 now seems to protect immediate downside, which if broken is likely to drag the pair back towards 1.0220 horizontal support. A follow through weakness below 1.0220 support would expose sub-1.0200 support near 1.0175 region.
EUR/GBP finds some support near 0.8450 after German CPI
The EUR/GBP cross remained well offered near 6-day lows and failed to gain any respite from upbeat German CPI print.Currently trading around 0.8460-65 band, today's better-than-expected German employment figures and upbeat CPI print for December failed to attract any buying interest around the shared currency, albeit helped the cross to halt Friday's sharp reversal move from mid-0.8600 level for the time being. Earlier during the day, the cross came under renewed selling pressure on Tuesday after UK manufacturing PMI print for December surpassed even the most optimistic estimates and rose to 30-month high. Moreover, an intense selling pressure surrounding the EUR/USD major further contributed to the offered tone surrounding EUR/GBP cross. A slew of important macro releases, scheduled at the beginning of a new month, would continue to grab attention and would assist investors to determine the pair's next leg of directional move. A follow through selling pressure below 0.8450 region is likely to drag the cross to sub-0.8400 level, towards testing its next support near 0.8385-80 region ahead of multi-month lows support near 0.8335-30 horizontal support. On the upside, any recovery momentum might now confront resistance near 0.8500 psychological mark, which if cleared decisively might trigger a short-covering rally back towards 0.8545-50 horizontal resistance, en-route 50-day SMA resistance near 0.8600 handle.
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