U.S. Dollar Trading (USD) the Dollar was strong for the most of the day as manufacturing PMI’s around the world showed the global outlook was still weak. China HSBC Manufacturing PMI remained under 50 at 47.8 and is the 11th month of contraction. The general environment for global stocks though is positive due to the ongoing aggressive easing from central banks. Looking ahead, FOMC Member Lockhart Speaks.
The Euro (EUR) the EUR/USD led the majors lower yesterday as weak longs bailed after the single currency broke through 1.3000. Support was found eventually at 1.2940 and we rebounded slightly with the US Stocks. Bulls will be hoping to close the week above 1.3000 as this will set up the pair for more gains next week. EUR/JPY has been under pressure but is holding above Y101 for now. The Sterling (GBP) the GBP/USD outperformed other pairs holding at 1.6180 on the downside before returning to 1.6220 in the US Session. Crosses supported the major with EUR/GBP falling briefly below 0.8000. Looking ahead, BoE Governor King Speaks.
The Japanese Yen (JPY) the USD/JPY trundled along the Y78.20 not moving much on the day with strong support seen at the Y78 level once again. The QE3 Dollar weakness has been countered effectively by the BOJ’s own bond buying program. Australian Dollar (AUD) the AUD/USD was the hardest hit by the weak Chinese data with the pair slipping to week lows under 1.0400 founding support at the key 1.0380 level before rebounding to 1.0450. The market is now evenly poised with the pro-growth US/ECB countering the weak China outlook.
Oil & Gold (XAU) Gold sellers hit support at $1756 twice before reversing back to $1770. OIL/USD rallied slightly up to $93 but is cautious after the heavy losses in the last few days.
Pairs to watch
EUR/USD Retest 1.3000 Friday?
XAU/USD mood set for $1780 retest?