Lots of economic data and events scheduled for the day, but all with low to moderate volatility risks:
Data released so far:
Australia: November retail sales rose 1.2 percent.
Japan: The simultaneous and leading economic indicator will be updated at 5:00 GMT. The trade balance figures will be released at 23:50 GMT.
Spain: Industrial Production Report will be published in November at 8:00 GMT.
Italy: November Retail Sales Report will be released at 9:00 GMT.
UK: The Bank of England will release its credit report at 9:30 GMT.
Greece: Unemployment report to be released at 10:00 GMT.
Eurozone: Industrial Production Report November will be released at 10:00 GMT. The European Central Bank will release the minutes of the meeting at 12:30 GMT.|
Portugal: Consumer price inflation report to be released at 11:00 GMT.
US: Producer Price Inflation report will be released at 13:30 GMT, with weekly jobless claims report. The EIA report will release the weekly natural gas inventory report at 15:30 GMT. The December budget will be released at 19:00 GMT. Fed Chairman Dudley is scheduled to speak at 20:30 GMT.
The Euro rose on Thursday for a second consecutive day, supported by a decline in the Dollar against major currencies, and ahead of the Minutes of the ECB meeting.
The minutes of the ECB’s last meeting, which witnessed the stabilization of Monetary Policy, clearly indicates how successful the Bank’s Monetary Policy is, with a decline in Inflation in the short term, and the Stimulus program to continue till September.
Despite recent declines, the EURUSD pair still has to break below the support levels at 1.1940 and 1.1900 to confirm the downtrend. A breach of the resistance levels around 1.1960 would affect the current bearish trend and introduce a sideways trend.
The royal currency fluctuated in a tight range against the US Dollar during the Asian trading session on Thursday after the declines witnessed yesterday.
The RSI reading of the Industrial Production Index for November showed that Manufacturing Production accelerated to 0.4% from last October, while Industrial Production showed a consistent growth rate with expectations for 0.4% vs. 0.2% in October.
Despite recent declines, the GBPUSD pair still has to break below the support at 1.3480 to confirm a continued decline. Breaking near resistance levels at 1.3500 would affect the current bearish trend and introduce a sideways trend.
The US Dollar is trying to recover against the Japanese Yen on Thursday after reaching its lowest level. The Japanese Yen found support from the Bank of Japan’s unexpected decision to cut its purchases of Government Bonds, raising expectations that the Bank is on track to withdraw Monetary Stimulus this year.
The JPY’s decline today comes despite the decline in the Asian and Japanese Stock Indices, which would have ordinarily helped the Yen to rise because it is an alternative investment. However, the technical reading remains negative for the pair and a clear control of bearish movement on prices, which is expected to continue until the price targets 111.20
The lack of clarity still clearly affects the USDCHF’s trading with no strong signs of a possible price break in any direction. A breach above the price at 0.9845 or a break of the near-price at 0.9760 would give more clarity to the expected movement which would be the same direction of the break.
Gold prices rose during the Asian session on Thursday for the second day after recording the highest level in four months during yesterday’s session. This comes in light of the decline of the US Dollar against currencies in addition to news of China’s intention to stop or reduce the purchase of US Government Bonds triggering the Dollar’s nosedive yesterday.
Markets are expecting the release of Inflation Data from the United States tomorrow, Friday, which will contribute to knowing the future of US Interest Rates and Monetary Policy.
The rebound in the price breaching resistance levels in 1321 will strengthen the optimism and push the price test to 1325 levels. A return of prices below the 1314 support level would, however, temporarily alleviate the optimism.