The pound is the laggard as we begin the European morning
Cable touched a low of 1.3167 in the past half-hour before moving up slightly now but the pound is still the weakest performer among the major currencies bloc so far today. The latest on Brexit developments is that May is potentially facing a Cabinet revolt with growing pressures for her to step down as prime minister in order to win support for a Brexit deal.
100 and 200 hour MA and 50% retracement
The GBPUSD has moved up to some formidable topside resistance defined by the 100 hour and 200 hour moving averages at the 1.3204-104 area. I would expect sellers to lean gives that area with stops on a momentum move above. The 50% of the move down from the March 5 is also in the area at 1.31912.
Watching the 50 hour MA
The Nasdaq is giving up some of the gains from yesterday in trading today but is bouncing off the lows in recent trading.
Looking at the hourly chart above, the index yesterday at the low stalled just above the 50 hour MA (white line). Today, that MA comes in at 7711.47 (and rising). Traders willl be eyeing that level on dip. Stay above keeps shorts anxious. Move below and the run higher may see some profit taking.
Looks toward the 110.00 level and 61.8% at 109.88
The weaker Markit PMI data is helping to push the USDJPY to new lows on the day. The pair is approaching the 110.00 level with a low at 110.06. There are $829M of option expires at 110.00 in the USDJPY today. That may stall the fall near the level.
Earlier the USDCHF moved higher after the weak Euro data. That rally moved right up to the 100 hour MA and the 100 day MA which were more or less converged at 0.9968. The high reached 0.9969 and backed off.
Moving averages broken on the run lower today
The PMI data out of the EU were much weaker than expexted and the EURUSD raced lower. Looking at the 1 minute chart below, the pair raced below the 100 hour and 100 day MA and the 200 hour MA in the first minute after the report (the run was about 43 pips in the first minute). The fall continued for another 40 pips over the 30 minutes or so to the low of 1.1287. Total move was about 83 pips. Since that low, the pair has had higher lows at 1.1292-94. A move below that intraday floor would be more bearish intraday. The corrective high has reached 1.1319 - that is below the 38.2% of the trend move down (at 1.13266). Sellers are still in control.
Below the 50% retracement
The USDJPY is printing fresh lows and trading at the lowest level since Feb 12th. The pair is below its 50% retracement of the move up from the end of January low at 1110.31. The Feb 15 low at 110.218 was briefly broken. Get and stay below that low would be more bearish.
Five week lows for USD/JPY
It's all about the bond market today. US 10-year yields are down 6.4 basis points to 2.47%. That's important because the Fed funds rate is 2.25%-2.50% with the effective rate at 2.41%.
Weaker PMI data sends EUR pairs lower
The weaker than expected PMI data out of Europe has the EUR pairs sharply lower in trading today with the EURJPY leading the way at -1.08% in the morning snapshot. The EUR is lower vs the GBP by -0.93% and the USD by -0.67%. The JPY is back to getting risk-off flows. The European shares are under pressure as are yields. German 10 year yields are below 0.0% (first since October 2016) which is certainly not helping the EUR at all.
Cable goes from higher to lower and now back higher again
Cable's bounce after testing the 12 March support and bids around the 1.3000 handle overnight met a stumbling block earlier as the dollar gained on risk aversion in markets. That of course came after Germany's dismal manufacturing PMI print which sent equities and the euro tumbling on the day.
Risk sentiment sours after Germany's manufacturing PMI misses heavily
Germany's woeful data not only sparked a decline in the euro earlier but it also helped to reignite global growth worries among investors and that is resulting in a sharp decline in stocks as well as bonds rally on the back of the news.
EUR/USD falls from 1.1370 to now near the 1.1300 handle
As I'm writing up the post, EUR/USD is continuing its fall with the lows now touching 1.1304. It's a massive setback for the single currency where economic data was seen as on the road to recovery before this hits. That will surely knock the wind out of the sails of the euro and right now we're going to focus on economic worries once again.
EUR/USD is trapped near key technical levels again
Price falls back to trade near the 100-day MA (red line) @ 1.1367 with the trendline channel hovering just below that as the euro struggles to capitalise on the dollar's weakness following the FOMC meeting decision on Wednesday.
Cable slump continues
It's getting ugly in the pound. Cable is down 177 pips to a fresh low at 1.3022.
The drop broke the 55-day moving average. That was a key level because it supported teh drop earlier this month.
GBP/USD falls to a low of 1.3134 on the day, lowest since 13 March
Price is looking to now sail past the overnight low of 1.3147 with light bids around 1.3120-25 seen next in line for the pair. Beyond that, further support is only seen around the 1.3100 handle. With price falling below the 200-hour MA (blue line) earlier today, sellers are now in near-term control of the pair.
The greenback pares losses against the euro, swissie and loonie
And is continuing to extend gains against the pound as well, with cable falling to a low of 1.3164 now. Meanwhile, EUR/USD touches a low of 1.1406 on the session and is looking towards testing the 1.1400 handle.
USD/JPY touches a low of 110.36 on the session
Yen pairs are advancing in early morning trade in Europe as Treasury yields come back into focus and we're seeing a further drop across the curve to start the day. Japanese markets were closed so this is the first glimpse we're seeing of yields today.
Cable dips back under the 1.3200 handle
EU27 leaders are said to be looking at 22 May as the Brexit extension date rather than 30 June as requested by May and that is causing the pound to have a bit of a rocky start in European morning trade. Cable has fallen from 1.3210-20 levels to now just under 1.3190 currently.