30 September, 2015
EURUSD daily chart observations show a pause in the August price advance from 1.0850 to 1.1713 with current price lacking direction. The fact that price had stopped near the 260 period moving average around the 1.17 area gives reason that downward pressure on price is still present. Further moving average analysis spots a bullish double moving average cross of the 10 and 50 MA that accrued around mid August. Additionally, a bullish stochastic oscillator supports my technical view that price may attempt to make a new lower top sub 1.1460 before tracing out some range trading between 1.1460 and 1.1090. Traders may look to stand aside while price trades in a range or attempts to play the range between the relevant support and resistance levels indicated on the above EURUSD daily chart.
The German jobs market is looking healthy as the jobless rate was unchanged at 6.4% and wage growth is accelerating, which together with low inflation is pushing up disposable income and underpinning consumption. France has been underperforming Germany amid the lack of structural reforms and weak productivity growth, but latest confidence indicators suggest that despite the fundamental weakness in the French economy, there is somewhat of a cyclical recovery that is having a positive effect.
ECB’s Hansson: “Everything is possible” on QE. The Finnish central bank head said at a conference in Italy that “it is too early to discuss changes to the quantitative easing program”. He added that there are “moderate” inflation pressures in the Eurozone and that “a lot depends on how inflation will develop, if it slows or accelerates”. So for now the ECB remains in wait and see mode, while keeping the door to further easing wide open.
Asian stocks rallied. The Nikkei 225 closed with the solid 2.7% gain and Australia’s ASX 200 with an impressive 2.1% rise, while the Shanghai Composite was showing just over a 1% advance in late PM session.
U.S. Consumer Confidence Index in September rose to 103 from 101.3 in August. This points to a continuation of strong consumer spending.
Currency Pairs, Grouped Performance (% change)
The new Currency Movers Charts show the percentage change from previous day’s close to the current moment against the other major currencies.
The JPY is trading slightly higher across the board even through Japan Retail Sales shrank in July, the AUD is sharply lower as continued weakness in China and commodities prices will dominate the path of the AUD.
The EUR is showing some signs of strength as price trades in a recent range as the market wait for the U.S. jobs report data on Friday.
Significant daily support and resistance levels for these pairs are:
Main Macro Events Today
• GBP UK Q2 GDP data show an unexpected down revision to 2.4% y/y from the 2.6% provisional estimate, though the q/q figure is unchanged at 0.7% growth. The quarterly growth figure is an improvement on Q1′s 0.4%, though deteriorating global conditions and survey evidences point to a ebb in Q3 growth back to a 0.5% rate.
• EUR German retail sales: dropped 0.4% m/m,less of a correction from the strong rise in July but against consensus expectations for a slight rise over the month. Retail sales cover less than 50% of overall consumption and are likely understating overall trends, although annual increases in retail sales also remain robust as low unemployment, sizable wage gains and low inflation boost real disposable income.
• USD Chicago Purchasing Manager’s Index Producer sentiment looks poised to improve slightly with the ISM-adjusted average holding at 51 from August and 53 in July and June.
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