Euro dollar enjoyed some positive PMIs and managed to break resistance. The gains held even as the all important ZEW survey was back to Lehman levels. Before Berannke speaks on Friday, there are still many events to move the markets today.
Here’s a quick update on technicals, fundamentals and what’s going on in the markets.
- Asian session: Quiet session saw range trading (1.4350 to 1.4450). The break came in the European session.
- Current range 1.4450 to 1.4520.
- Further levels in both directions: Below 1.4450, 1.4350, 1.4282, 1.4220, 1.4160, 1.4070, 1.4030.
- Above: 1.4520, 1.4650, 1.47, 1.4775, 1.4882, 1.4940
- After the important 1.4450 line was broken, it worked as support. 1.4520 is the highest level in a month.
- 1.4282 is significant support on the downside.
Euro/Dollar moving up – click on the graph to enlarge.
- 7:00 French Flash Services PMI. Exp. 53.3. Actual 56.1. This was the first positive surprise that pushed the pair higher.
- 7:00 French Flash Manufacturing PMI: Exp. 50.1. Actual 49.3points.
- 7:30 German Flash Services PMI. Exp. 52.1. Actual 50.4 points.
- 7:30 German Flash Manufacturing PMI: Exp. 50.9. Actual 52 points.
- 8:00 Flash Services PMI. Exp. 51. Actual 51.5 points.
- 8:00 Flash Manufacturing PMI. Exp. 49.6. Actual 49.7 points.
- 9:00 German ZEW Economic Sentiment. Exp. -24.8. Actual -37.6 points. Huge disappointment only temporarily stops the pair.
- 14:00 US New Home Sales. Exp. 313K.
- 14:00 US Richmond Manufacturing Index. Exp. -7 points.
- 14:00 European Consumer Confidence. Exp. -12 points.
* All times are GMT.
For more events later in the week, see the Euro to dollar forecast
- Chinese PMI Surprises: The Chinese PMI, as recorded by HSBC, came out better than expected, at 49.8 points. This also provides a positive atmosphere that helps the euro. It’s important to note that this still reflects mild contraction.
- Bernanke awaited: Tension is growing towards the speech of Ben Bernanke in Jackson Hole on Friday. Some expect him to hint about QE3 in order to stop the falls in stock markets, although this can harm the economy at this time. Stay tuned for a preview for this big event. Here are 7 scenarios for the Jackson Hole speech, with outcomes for the greenback.
- Eurobonds? German chancellor Angela Merkel rejected eurobonds at this time in an interview. Also the French oppose it, but many European officials push for it. This seems to many as a solution for the debt crisis, although it also has its problems.
- Terrible US data: The Philly Fed Index plunged to the lowest level since March 2009. Also other figures such as jobless claims and existing home sales were terrible. The bad US figures and the European banking worries sent global stock markets lower yesterday in Europe, then in the US, then in Asia, and now in Europe again.
- Greek bailout questioned: Finland demands collateral from Greece in order to participate in the bailout. This is causing headaches across the continent, as other countries want the same deal.
- ECB Sterilizes Bond Buying : The ECB continues keeping yields down. The ECB already spent above 26 billion euros in the current round of buying Italian and Spanish bonds. It has managed to drain this money from the markets today. Sterilized actions are positive for the currency.