4 Dec 2014
Recap: EUR/USD visits the 1.2300 ahead of ECB; What are you waiting for?
FXStreet (San Francisco) - Tomorrow in the Battle, think on me. The dollar traded mixed on Wednesday as the Greenback rose against the Yen and the Euro while it fell versus the GBP/USD. All of this despite mixed economic data earlier in the day and an optimistic Beige Book at the end of the session.
ISM non Manufacturing index rose to 59.3 in November, highest since August. The employment component was down to 56.7, while new orders rose to 61.4. BoC rate remained unchanged at 1.0%.
The Federal Reserve sees a stronger manufacturing sector with "widespread" gains in the labor market. Economic activity increased in October and November. The release also showed that service and manufacturing sectors "express increasingly widespread optimism about the near-term outlook."
In the currency market, the EUR/USD declined for second day and after losing 0.60% on the day it closed at 1.2310. The EUR/USD found a wall at 1.2300; however, as Valeria Bednarik from FXStreet commented in a recent report, " dominant bearish trend is undeniable and if somehow the ECB triggers an EUR recovery, investors will likely see it as an opportunity to sell higher." 1.2300 is the level to be broken before 1.2230 and 1.2190.
The USD/JPY rose for second day as the pair rallied to the boundaries of the 120.00 level. According to Ross Burland from FXStreet, the question about the 120.00 and even the 122.00 is not if, but when. "120.00 is a very psychological level, that even if breached, the question is how much more room is there to go realistically in this rally?"
Burland affirms that "the scenario is risking a potential gain of up to, say, 122.00 for 200 pips vs the downside towards 115.00 as the markets move into the holiday season and consolidate on corporate repatriation flows."
On the GBP/USD field, cable recovered half of yesterday's losses as the pair enjoyed the Sterling's better shape than the other majors. The UK's Autumn Statement showed that the government will need to borrow more money this year than previously expected. Chancellor George Osborne informed that the goverment also raised GDP forecast growth to 3.0% from 2.7% this year and to 2.4% from 2.3% in 2015.
The cable closed at 1.5685, 0.31% positive on the day. Top movers were CAD/CHF (+0.90%), GBP/CHF (+0.88%) and USD/ZAR (+0.87%). To the downside, top losers were USD/RUB (-1.74%), amid news that the Russian central bank is supporting the Ruble; EUR/CAD (-0.92%) and EUR/GBP (-0.90).
So, what about the ECB? Michael Sedacca from Minyanville affirms that the "the ECB will do nothing and the result is positive - and I am not one to bet against them. It seems to me the ECB has said very vocally it will expand the assets it purchases next year to accelerate its balance sheet expectations, legal actions be damned. Why fight it?"
Anyway, tomorrow in the Battle, think on me.
Key Data
US Private sector employment increased by 208K In November - ADP report
Q3 2014 US non-farm productivity final 2.3% vs 2.4% exp
United States Markit Services PMI down to 56.2 in November from previous 57.1
November 2014 US ISM non-manufacturing PMI 59.3 vs 57.5 exp
Bank of Canada maintains rates, inflation stronger on CAD weakness
Beige Book: Jobs and economy continues to expand; optimism
US stocks close at records as Fed Beige shows optimism
ISM non Manufacturing index rose to 59.3 in November, highest since August. The employment component was down to 56.7, while new orders rose to 61.4. BoC rate remained unchanged at 1.0%.
The Federal Reserve sees a stronger manufacturing sector with "widespread" gains in the labor market. Economic activity increased in October and November. The release also showed that service and manufacturing sectors "express increasingly widespread optimism about the near-term outlook."
In the currency market, the EUR/USD declined for second day and after losing 0.60% on the day it closed at 1.2310. The EUR/USD found a wall at 1.2300; however, as Valeria Bednarik from FXStreet commented in a recent report, " dominant bearish trend is undeniable and if somehow the ECB triggers an EUR recovery, investors will likely see it as an opportunity to sell higher." 1.2300 is the level to be broken before 1.2230 and 1.2190.
The USD/JPY rose for second day as the pair rallied to the boundaries of the 120.00 level. According to Ross Burland from FXStreet, the question about the 120.00 and even the 122.00 is not if, but when. "120.00 is a very psychological level, that even if breached, the question is how much more room is there to go realistically in this rally?"
Burland affirms that "the scenario is risking a potential gain of up to, say, 122.00 for 200 pips vs the downside towards 115.00 as the markets move into the holiday season and consolidate on corporate repatriation flows."
On the GBP/USD field, cable recovered half of yesterday's losses as the pair enjoyed the Sterling's better shape than the other majors. The UK's Autumn Statement showed that the government will need to borrow more money this year than previously expected. Chancellor George Osborne informed that the goverment also raised GDP forecast growth to 3.0% from 2.7% this year and to 2.4% from 2.3% in 2015.
The cable closed at 1.5685, 0.31% positive on the day. Top movers were CAD/CHF (+0.90%), GBP/CHF (+0.88%) and USD/ZAR (+0.87%). To the downside, top losers were USD/RUB (-1.74%), amid news that the Russian central bank is supporting the Ruble; EUR/CAD (-0.92%) and EUR/GBP (-0.90).
So, what about the ECB? Michael Sedacca from Minyanville affirms that the "the ECB will do nothing and the result is positive - and I am not one to bet against them. It seems to me the ECB has said very vocally it will expand the assets it purchases next year to accelerate its balance sheet expectations, legal actions be damned. Why fight it?"
Anyway, tomorrow in the Battle, think on me.
Key Data
US Private sector employment increased by 208K In November - ADP report
Q3 2014 US non-farm productivity final 2.3% vs 2.4% exp
United States Markit Services PMI down to 56.2 in November from previous 57.1
November 2014 US ISM non-manufacturing PMI 59.3 vs 57.5 exp
Bank of Canada maintains rates, inflation stronger on CAD weakness
Beige Book: Jobs and economy continues to expand; optimism
US stocks close at records as Fed Beige shows optimism