Markets Keep Trading Risk Off, Eurozone PMIs Take Center Stage

AUD and NZD Slide, JPY and CHF Gain on More Risk Aversion

The US dollar traded mixed against the other G10 currencies on Thursday and during the Asian morning Friday. It gained against AUD, NZD, NOK, and slightly against CAD, while it underperformed versus JPY, CHF, and EUR. The greenback was found virtually unchanged against GBP and SEK.

AUD/JPY — Technical Outlook

AUD/JPY experienced a sharp reversal to the downside yesterday. The slide may continue for a bit more, but if the pair gets a good hold-up near its short-term upside support line taken from the low of June 12 th, the bulls may take advantage of the lower rate and lift it up again. That’s why we will stay positive overall, at least for now.

EZ PMIs to Add to Hopes of Economic Recovery

As for today, investors and traders may pay attention to the preliminary PMIs for July. We start the day with the prints from several Eurozone members and the bloc as a whole. The Euro-area manufacturing index is anticipated to have risen to the equilibrium level of 50.0 from 47.4, while the services one is expected to reveal expansion for the first time since February. Specifically, it is expected to have increased to 51.0 from 48.3. The composite index is forecast to have inched up to 51.1 from 48.5.

EUR/USD — Technical Outlook

EUR/USD had a decent rally this week, until it found resistance near the 1.1627 barrier. This morning, the pair is correcting lower, however, let’s not forget that the rate is still above its short-term upside support line taken from the low of July 10 th. As long as the pair stays above that upside line, we will remain positive, at least with the near-term outlook.

As for the Rest of Today’s Events

We get preliminary PMIs from the UK as well, but no forecast is currently available. During the early European morning, we already got the nation’s retail sales for June, which came in much better than expected. Thus, combined with this, decent PMIs may diminish expectations with regards to the adoption of negative interest rates by the BoE, especially after last week’s better-than-expected inflation and employment data.

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