General market theme
A day of corrections in the major instruments we monitor in our report yesterday as after the rallies post-FOMC the Dollar managed to claw back some of the ground it lost after the Fed meeting. The Euro and the Pound were in a corrective mood and allowed the US currency to recover partially but we’re not sure that the Dollar is in clear yet.
Being Friday today we might not see too much of a price action but starting next week we would expect further weakness from the buck at least until fresh data support the case of a rate hike before the end of the year. Today the focus will be primarily in Europe with the release of several PMI reports from the Euro area and it will be interesting to see how they print and how the Euro will react.
Price action highlights
The Euro pulled back over the past 24 hours and after making it to the 1.1250 area it corrected to test the 1.1200 level where the 55 and 200-period moving averages lie and it attempts to mount a new effort to the upside this morning. The release of the Eurozone PMI figures will play a role in today’s price action and should the levels print steady it could help the Single currency make another move towards the 1.1250 area on the back of the current weakness in the US Dollar.
The Cable was also on a corrective course yesterday and after reaching the 1.3100 level the rate dropped to the 1.3030 area where we find it this morning. It is crucial for the Pound to find some support around this level if it is to successfully challenge the 1.3100 resistance once more in an attempt to look higher and capitalize on Dollar’s weakness on the back of the conservative Fed meeting earlier this week.
Focus of the day
As we mentioned above today the focus will be on the Eurozone with the release of several PMI readings from around Europe. Analysts expect the figures to print in a mixed manner so it will be interesting to see how the Euro will react to them while later in the day the release of the Manufacturing PMI figures from the US is also important given the current US Dollar weakness.