USD strength
- Cable to break support at key weekly trend line?
- UK August CBI trends total orders -44 vs -35 expected
- And now the UK's Brexit negotiator's response
- Quelle surprise? Barnier disappointed by this week's Brexit progress
- Shorts to take something off the table on EURUSD ahead of 1.1800
- UK August flash services PMI 60.1 vs 57.0 expected
- EURUSD breaks lower heading into support at 1.1815
- Eurozone August flash services PMI 50.1 vs 54.5 expected
- Brexit: No progress on latest round of EU-UK negotiations
- Germany August flash manufacturing PMI 53.0 vs 52.5 expected
- France August flash manufacturing PMI 49.0 vs 53.7 expected
- EURUSD sat on option level at 1.1875
Other markets
- FTSE: -0.09%
- Euro Stoxx:-0.10%
- Dax: -0.6%
- Gold: -0.68%
- Bitcoin: -1.13%
The session started with a positive handover from Asia after some positive vaccine news from Pfizer.
This positive risk on sentiment quickly drained from the markets on a weak flash PMI reading from France. The data missed across the board and was lower than all of the lowest expectations.
Next up was the German Flash PMI's. The German data was a mixed bag with a beat on the manufacturing headline. However, the service and composite readings came in with a miss and the EURUSD carried on tracking lower down to 1.1832 ahead of the main European flash readings pulling lower from the option level at 1.1875.
The European flash PMI's also disappointed and missed across the board. This puts the Eurozone at a pivotal point in its recovery and this miss will be eyed by the ECB carefully. This also looks like more downside for the EURUSD in the near term if the weekly chart closes with a false break of that 1.1900 level. The EURUSD fell into near term support at 1.1815 and this was the place to lighten some of the load for short term EURUSD shorts.
Doom and gloom from latest Brexit negotiations
We warned traders on the GBP of some possible Brexit headlines as EU and UK negotiators held press conferences. This warning was timely as cable came under pressure after the latest round of Brexit talks yielded nothing. Or perhaps less than nothing as Barnier feared talks were heading backwards rather than forwards. Cable starting falling on the headlines and making fresh daily lows.It is currently breaking through a key weekly trend line level.
In the big picture there was nothing new here in the talks. However, the clock is ticking and cable's reaction shows that GBP volatility should be ahead as we approach the functional deadline at the end of October. In terms of further moves lets see what US PMI data brings later.
Ok, that's all from me. Been a pleasure as always and I am scheduled to be back again on Monday. Have a great weekend.
