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| FX Majors Consolidating after Yesterday’s Rally Posted: 01 Dec 2011 04:59 AM PST
Successful bond auctions in Spain and France have kept the markets buoyant with Asian equities rallying, though this may be just be markets playing catch up with their American counterparts after yesterday's rally. European stocks are mixed while the major currencies appear to be consolidating. This is not surprising as we approach some important US data both this afternoon and tomorrow. European bonds are up for the day with French 10-year bonds the best performers following decent bond auctions in both Spain and France. The move to increase USD liquidity has carried over into today but market players may be overlooking European data that was released this morning. Euro zone final manufacturing PMI was in-line with market expectations at 46.4 but is down for the sixth straight month and well below the 50 boom/bust level. Traders will now turn their attention to US data releases with the ISM survey today and the jobs report tomorrow. The EUR/USD is within yesterday's wide range but a move above yesterday's high and the pair could test the 1.3610 resistance from the November 18th high. Support is found back at 1.3410 from this morning's low. The kiwi is looking stretched after rallying 5.5% from last week's lows against the USD. The NZD/USD has found resistance at its 55-day moving average at 0.7820. A break here could propel the pair to the 0.8020 from the trend line off of the August and October highs. Support comes in at yesterday's low of 0.7575 and the November low of 0.7400. Read more forex trading news on our forex blog. |
| Central Banks and US Data Boost Risk Appetite Posted: 01 Dec 2011 01:13 AM PST
Today's data releases from the UK and the US may help higher yielding assets receive a bid following yesterday's coordinated central bank move and a reduced Chinese reserve requirement. This morning we'll get UK manufacturing PMI which is forecasted to fall to 47.1 from 47.4. Sterling has been bid the past 3-days versus the USD and the GBP/USD may find initial resistance at yesterday's high of 1.5780, followed by the November 18th high of 1.5890. Support comes in at the November low of 1.5420. Building on yesterday's positive ADP jobs report and pending home sales the strong US economic data looks to continue into today and tomorrow. ISM manufacturing PMI will likely show the momentum from Q3 is carrying over in to Q4 which could translate into stronger GDP and finally put to bed the idea of a double dip US recession. Stronger data will likely keep the USD on its back foot and the USD/JPY could test yesterday's low of 77.30 with scope for the November 18th low of 76.55. Read more forex trading news on our forex blog. |
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