Markets Dragged Lower By EU Recession Concerns

<p>Markets Dragged Lower By EU Recession Concerns. European markets rose early on Monday, supported by unexpectedly good Chinese PMI results. The mixed European PMI data […]</p>

Markets Dragged Lower By EU Recession Concerns. European markets rose early on Monday, supported by unexpectedly good Chinese PMI results. The mixed European PMI data released later on and signalizing an onset of recession in the area reversed the trend, pushing European stocks into negative territory.

 

EUR/USD

Range: 1.3325 – 1.3355
Support: 1.3325
Resistance: 1.3350

Euro-dollar closed in NY at 1.3320, after recovering off traded lows in this session of 1.3278. The rate was pulling back from a late NY recovery high of 1.3337 into Asia, the rate posting overnight lows at 1.3313 in opening trade before bouncing higher. A strong sell off in dollar-yen provided for general dollar weakness and allowed euro-dollar to push up to highs of 1.3356 before momentum faded. The rate drifted lower to 1.3324 with recovery efforts ahead of the European open meeting resistance around 1.3340, though the rate was pushing up against this level in opening trade. Offers seen placed at 1.3350 and 1.3356 with a break above to open a move toward Monday’s high at 1.3381. Stiff resistance seems to be in play from 1.3385 to the much reported barrier at 1.3400. Support 1.3325-1.3320, a break to allow for a deeper move toward 1.3300.

GBP/USD
Range: 1.6021 – 1.6045
Support: 1.6020
Resistance: 1.6050

Cable closed in NY at 1.6022 after recovering off session lows of 1.5992 to 1.6044. The rate marked overnight lows in Asia of 1.6021 in opening trade before it was pressured higher on general dollar weakness, led by a strong sell off in dollar-yen. The rate pushed to a high of 1.6048 before losing momentum, with the rate drifting off to 1.6027 before settling around 1.6030 ahead of the European open. Cable resistance seen into 1.6050 ahead of 1.6063, with offers noted to 1.6065. Further offers reported at 1.6080 ahead of stronger interest between 1.6095-1.6100. Support remains into 1.6020, a break to open a deeper move toward 1.6005-1.6000 ahead of 1.5995-1.5990. Stronger demand noted into 1.5980 ahead of 1.5965-1.5950.
Gold
Range: 1,677.44 – 1,680.52
Support: 1,663.05
Resistance: 1,690.55

Gold moved up sharply yesterday and is holding firm around 1,678 in Asia having recovered from lows of 1,663.05 yesterday on bargain hunting and short covering, assisted by a sharp rally in crude oil prices and an early dollar strength waned. Morning weakness was seen on the back of some weaker PMI data in Europe despite the strong Chinese mfg PMI data over the weekend. Today Asia saw a jump in the non-mfg Chinese PMI which has kept the metal in consolidation mode after the rally yesterday to 1,683.55 which eventually faltered just above the 100-dma at 1,683.12. Initial resistance is at the 200-dma at 1,690.55 ahead of 1,697.25 and the psychological 1,700 level. Support is now seen towards yesterday’s 1,663.05 lows and 1,659.80.

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.