USD Gains, EU Equities Slide, but Wall Street Rebounds

PMIs to Reveal a First Glimpse on October Economic Performance

The US dollar traded higher against most of the other major currencies on Thursday and during the Asian morning Friday. It gained the most versus AUD, NZD, and CAD in that order, while it lost some ground only versus CHF and JPY.

Euro Stoxx 50 — Technical Outlook

The Euro Stoxx 50 cash index traded lower yesterday, but hit support at 4137 and today, it edged slightly higher. Overall, the index remains above the prior downside resistance line taken from the high of September 16th, as well as above the short-term upside one drawn from the low of October 6th. In our view, these technical indicators keep the short-term outlook positive.

EUR/GBP — Technical Outlook

EUR/GBP traded in a consolidative manner yesterday and today in Asia, staying slightly above the key support zone of 0.8420, which has been preventing the pair from dropping further since last Friday. Overall, the price structure suggests a downtrend that’s been in place since September 29th, but in order to get confident on its continuation, we would like to see a break below 0.8420 first.

As for the Rest of Today’s Events

During the Asian session, we already got Japan’s National CPIs for September, while during the early European morning, the UK retail sales for the month were out. Both Japan’s headline and core rates rebounded within the positive territory, but they remain well below the BoJ’s objective of 2% and thus, policymakers are unlikely to be tempted to start thinking about monetary policy normalization anytime soon. In the UK, both headline and core sales slid by more than expected.

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