PMI data to dominate today’s moves

<p>The last month of the year gets under way with a lot of volatility in the FX markets. Friday saw some strong US dollar moves […]</p>

The last month of the year gets under way with a lot of volatility in the FX markets. Friday saw some strong US dollar moves mainly against GBP, JPY and CAD, which has carried on overnight and this morning, with the USD firmly in control.

Main weekend news was the Swiss referendum on the gold vote, which was rejected.  The effect in FX was mainly the EUR/CHF which has popped up slightly as this gives the SNB more power to use FX reserves to protect the cap at 1.2000.

The China PMI data was released and indicating weak growth, with now more stimulus looking the more likely.  This kept pressure on the Aussie, Kiwi, and yen overnight. AUD/USD is trading just below 0.8450 and NZD/USD trading just above 0.7800, USD/JPY just below  seven-year highs of 119.00.

Today is all about the PMIs: first up is the Eurozone, expected not to change from last and just above the expansion level at 50.4. Leading up to this data, the main Euro states will release individual PMI readings, with the main ones to look out for will be Germany and France.  Germany is looking to be just on the level of 50.0 and France still sitting in contraction levels of 47.6.  Spain has been released already and it has beat expectations at 54.7 from the previous 52.6, so Spain is leading the way in expansion. The  Euro is finding some support after that data now just below 1.2450 level.

In the UK, the PMI data is expected at 53.1 from the previous 53.2, this data may stop the fall of late in GBP but any worse than expected could see us break the 14th November lows of 1.5588.  Currently trading below 1.5650.

The US ends the day with its ISM PMI data, with an expected fall from 59 to 57.9, this may halt the gains for the mean time as we build up to the bigger events in the weak, notably the last non-farm payrolls of the year, on Friday.

Overnight data mainly comes from Australia, with building approvals set to bounce higher to 5.2%, but the main event is the cash rate and RBA statement.  Cash rate is expected to be left unchanged at 2.50% but the statement will be the key, as generally they like to point out that the AUD is still too high.

 

EUR/USD

Supports 1.2420 1.2400 1.2380 | Resistance 1.2460 1.2490 1.2500

 

 

USD/JPY

Supports 118.70 118.50 118.40   Resistance 119.900 119.10 119.30

 

 

GBP/USD

Supports 1.5590 1.5570 1.5540  Resistance 1.5645 1.5680 1.5700

 

 

 

 

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