Markets Dragged Lower By EU Recession Concerns

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.