EURUSD ATTEMPTS TO REBOUND AFTER STRONG EUROPEAN DATA
The EURUSD had a relief rally on Tuesday as the market reflected on positive economic numbers from Europe. According to Markit, the bloc’s manufacturing and services sectors did relatively well in November. Across the region, manufacturing PMI rose from 58.3 in October to 58.6 in November. The services PMI also jumped from 54.6 to 56.6. This happened even as more countries in the region saw an uptick in the number of Covid cases. In Germany and France, manufacturing PMI rose to 57.6 and 54.6, respectively. Still, there are concerns about the impact of these Covid-19 cases on the economy.
The NZDUSD pair declined sharply after the latest retail sales numbers from New Zealand. According to the country’s statistics agency, retail sales declined by 8.1% in the third quarter. This was a sharp reversal considering sales rose by about 3.3% in the previous quarter. Sales fell by 5.2% on a year-on-year basis. This performance was because the country saw an uptick in Covid-19 cases in the third quarter, which led to lockdowns. The pair will next react to the interest rate decision by the Reserve Bank of New Zealand (RBNZ) that is scheduled for Wednesday morning. With inflation rising, the bank is expected to hike interest rates for the second time.
European equities declined as investors reflected on the nomination of Jerome Powell as the Fed chair. IThe Stoxx 600 index declined by about 60 basis points. The same decline happened in Germany, France and the UK. Also, US futures like the Dow Jones and S&P 500 also declined. Analysts believe that Powell will continue with the gradual pace of tightening. The bank has already started tightening by reducing the amount of quantitative easing. One of the top movers today were Compass Group, which reinstated its forward guidance. Compass is the biggest catering company in the world. Shares of AO World, a retailer, declined after the company published weak earnings.
NZDUSD
The NZDUSD pair is trading at 0.6936, which is slightly above the intraday low of 0.6925. On the four-hour chart, the pair is below the dots of the parabolic SAR indicator. It has also moved below the 25-day and 50-day moving averages. At the same time, the MACD has moved below the neutral level. It has also moved below the 61.8% Fibonacci retracement level. Therefore, the pair will likely continue the bearish trend ahead of the RBNZ decision.
EURUSD
The EURUSD pair rose to a high of 1.1263, which was slightly higher than the intraday low of 1.1230. On the hourly chart, the pair is along with the lowest level on November 17th. The pair also moved slightly above the 25-day moving average while the bull’s power has risen. Therefore, the pair will likely continue with this relief rally for a while. In the long term, the bearish trend will likely continue.
AUDUSD
The AUDUSD pair declined to a low of 0.7210, which was the lowest level since October 1. It has dropped by more than 3% from its highest level this month. It is between the descending channel shown in green. Also, it has moved below the 25-day moving average. The Triple Exponential Average (TRIN) and MACD are still below the neutral level. Therefore, it will likely keep falling in the near term.
