The Eurozone is printing a bunch of PMIs today.
Will it translate to a EUR/USD bounce in the next couple of hours?
Before you place your orders, check out the top headlines that Asian session traders priced in today:
- US existing home sales spike to fastest rate since 2006 as housing-market boom accelerates further
- NZ’s weaker inflation prompts talk of more near-term stimulus
- Pelosi ‘optimistic’ of stimulus agreement with the White House before the weekend: ‘Both sides are serious about finding a compromise’
- Australia’s manufacturing sector loses momentum in October
- Australia’s services activity rose “solidly” in October after mild gain in September
- UK consumer sentiment falls by most since start of pandemic: GfK
- Japan’s consumer prices continue to slide on deflationary pressure from COVID-19
- Global stocks hold tight ranges as U.S. election caution sets in
- Move over bonds, FX taking over as investors’ new favorite playbook
Upcoming Potential Catalysts on the Economic Calendar:
- U.K.’s retail sales at 6:00 am GMT
- France’s manufacturing PMI at 7:15 am GMT
- France’s services PMI at 7:15 am GMT
- Germany’s manufacturing PMI at 7:30 am GMT
- Germany’s services PMI at 7:30 am GMT
- Eurozone’s manufacturing PMI at 8:00 am GMT
- Eurozone’s services PMI at 8:00 am GMT
- U.K.’s manufacturing PMI at 8:30 am GMT
- U.K.’s services PMI at 8:30 am GMT
- U.S. manufacturing PMI at 1:45 pm GMT
- U.S. services PMI at 1:45 pm GMT
What to Watch: EUR/USD
It will be all about PMI during the London session as the U.K., France, Germany, Eurozone, AND the U.S. all print the progress of their manufacturing and services industries.A quick look at the forex calendar tells us that market players are mostly expecting weaker readings in October. Not good when major Eurozone economies are clocking in record COVID-19 cases, U.K. consumers are already worried about a double-dip recession, and election uncertainty is preventing risk-taking in the U.S.
If today’s PMIs print better-than-expected results, then EUR/USD could bounce from a retest of the 1.1800 previous resistance. The 1.1850 handle is a good enough target given that EUR/USD’s average daily volatility is around 70 pips.
If we see disappointing PMIs, however, then traders could take profits from their higher-yielding bets and favor safe-havens like the dollar and yen. EUR/USD could drop back to its broken range and probably retest the 1.1750 mid-range levels, if not the 1.1700 range support.