Today’s results of the stress tests run by agency O.Wyman on Spanish banks would give market participants a better view of the beleaguered sector, and may pave the way to a full-scale bailout, materializing euro-bull desires.
… All that glitters is not gold
Recall that late PMI and other key results and indicators in the euro zone composite and in its core members are pointing to a soft economic growth in the third quarter, knocking once more on reality’s doors. After assessing this late bounce in EUR/USD, experts like K.Jones at the German lender Commerzbank comments “It is possible that this correction lower is over and the market will try the topside (favoured), however we remain unable to rule out a stab down to the trendline support at 1.2649 prior to recovery”. In the same line of thinking, strategist J.Foley at Rabobank argues “EUR/USD is currently well supported having bounced off the 200 day sma yesterday (EUR/USD1.2826). Going forward this level will remain key support, though we do see the risk of sharper pullbacks on a 1 mth view”.
… A new moth kicks in
Manufacturing PMI prints will inaugurate the docket for the euro zone and its core members on Monday, with consensus expecting the downside to be confirmed after the previous preliminary readings. Flash Italian unemployment rate will follow ahead of the US, Construction Spending, manufacturing PMI and manufacturing ISM.