Safe haven assets fall as tensions on Iran ease
The Japanese yen declined today against the USD after the market reacted to new services PMI data. Data showed that activity in the services sector declined to 49.4 from the previous 50.3. This came a day after the country released weaker manufacturing PMI data. The data also showed that the PMI declined from 48.8 to 48.4. These numbers indicate that the Japanese economy is struggling even after the $121 billion stimulus package that was announced in November. The market will receive overtime pay and average cash earnings data.
The euro was relatively unchanged against the USD in the Asian session. Yesterday, the market received important positive data from the European Union. German retail sales rose by 2.8%, which was higher than the previous 1.4%. The German composite PMI exited the contraction territory and rose to 50.2 from the previous 49.4. The composite PMI data from Europe rose from 50.6 to 50.9. The same positive trend was seen in the producer price index. The market will receive the preliminary consumer price index (CPI) data. The market expects the data to show that the CPI rose by 1.3% in December. This will be above the 1.0% growth in November. The region will also release retail sales data.
Traders will continue to focus on the ongoing tensions with Iran. The market will also focus on a number of key data from Europe and North America. The biggest data will be the non-manufacturing PMI data from the United States. The data from ISM is expected to show that the PMI increased from 53.9 to 54.5. The factory orders data is expected to decline from 0.3% to -0.8%. Ivey will release the PMI data. The market expects a PMI number to decline from 60 to 53.8. Switzerland will also release its CPI data, which is expected to show that inflation was unchanged in December.
The EUR/USD pair was unchanged during the Asian session. The pair is trading at 1.1192, which is slightly below yesterday’s high of 1.1205. The pair has also made a symmetrical triangle pattern. The price is along the 14-day moving averages and slightly above the 28-day moving averages. The pair could continue consolidating ahead of the NFP data, which will be released on Friday.
The XBR/USD pair declined as the market brushed-off the new tensions on the Middle East crisis. The pair reached a low of 67.45. The 14-day and 28-day EMA have started to make a bearish crossover. The RSI has moved from above the overbought level to the current level of 50. The average true range indicator has continued to rise. The pair may continue to see some volatility ahead of Iran’s reaction.
The XAU/USD pair declined from a high of 1587.80 to a low of 1555.00. This price is between the upper and middle line of the Bollinger Bands. The RSI has moved from the overbought level of 89 to a low of 62. The Chaikin oscillator too has been declining while the Average True Range has been increasing. As with crude oil, the pair may continue to see some volatility in the coming days.