Alpesh Patel
InvestingBetter.com
General market theme
Price action at the start of the week was limited in the major financial instruments we monitor in our daily report even though this week is expected to be one of the most important ones as we mentioned in our analysis yesterday. There’s a host of events coming our way leading up to the Non-Farm Payrolls report on Friday and given the way the financial markets have been trading these past two months traders are looking to capitalize on any opportunities that come their way.
With limited price action in the Euro and the Pound during the first 24 hours of the week traders will have the opportunity to receive fresh news from Europe, the UK and the US today that will dictate price action in the short term. The release of the German unemployment rate is expected to put the Single currency under fresh pressure while the UK Manufacturing PMI levels are closely monitored and could add to the troubles the Pound has been facing recently.
Price action highlights
The Euro took a fresh dive below the 1.0900 area yesterday and made an effort to reach the 1.0850 area consolidating above it overnight. The bias is bearish for the Single currency ahead of the upcoming ECB meeting on monetary policy where more easing is expected to be announced or hinted so the Euro will be vulnerable to fresh losses. Today the release of the German unemployment data might add to the pressure and a break below yesterday’s lows could clear the path for the 1.0800 area.
The Cable is proving quite resilient in recent sessions and even though it backed off the 1.4000 area the decline didn’t extend too far below the 1.3900 level yesterday. However this could again change today if the Manufacturing PMI levels print lower than expected highlighting once more the challenges the British domestic economy is facing. Other than that a strong ISM Manufacturing reading from the US later in the day might take its toll on both the Euro and the Pound today.
Focus of the day
As we detailed above our focus is all over the globe today, starting in the morning with the German unemployment data and the UK Manufacturing PMI levels before midday. Later in the day the release of the Manufacturing ISM report from the US could enhance any momentum that has built should it print in a bullish manner.
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