Euro jumps on positive PMI and retail sales data from Europe
Global stocks took a breather today as markets waited for more cues on trade. In Asia, the Shanghai composite declined by 13 points while the Nikkei rose by 50 points. In Europe, the DAX and CAC index rose by 15 and 18 points respectively. In the United States, Dow and S&P500 futures rose by 12 and 2 points respectively. In the past few days, global stocks have been surging on hopes that the US and China will reach a deal. However, according to Nikkei, China has insisted that the US must remove all tariffs for a deal to happen.
The euro rose today after the market received some reassuring data from Europe. In Germany, factory orders rose in September by 1.3%. This was higher than the -0.4% contraction that happened in August. The market was expecting the orders to increase by 0.1%. In Germany, services and composite PMI increased to 51.6 and 48.9 respectively. This was better than the consensus estimates of 51.2 and 48.6 respectively. In the European Union, retail sales increased by 3.1% in September. Services PMI increased to 52.2.
The price of crude oil declined today after data from the American Petroleum Institute (API) showed that inventories were rising. In the past week, inventories rose by more than 4.2 million barrels. Stocks at Cushing, which is the main delivery hub in Oklahoma rose for a fourth straight week. Later today, the EIA will release its weekly inventory numbers. The market expects the numbers to show that inventories rose by 1.5 million barrels. This will be significantly lower than last week’s inventories of 5.7 million barrels. API and EIA receive inventory data from 90% of US oil production. The market is also pessimistic that a deal between China and the US will happen.
The EUR/USD pair rose today after positive PMI and retail sales data. Still, the pair is significantly lower than yesterday’s high of 1.1092. On the hourly chart, the pair is trading at 1.1083, which is slightly lower than the 23.6% Fibonacci Retracement level. The price is just below the upper line of the Envelopes indicator. The RSI has moved from the oversold level of 14 to a high of 43. The pair may continue moving higher to the 38.2% Fibonacci level of 1.1100.
The XBR/USD pair declined to a low of 62 from yesterday’s high of 62.90. The duo pared some of those gains and is trading at 62.40. On the hourly chart, the price is along the middle line of Bollinger Bands. The moving average of the oscillator has moved up and is about to cross the neutral line of zero. The signal and main lines of Stochastic Oscillator have made a bullish crossover. The pair may remain at the current levels ahead of US inventories numbers.
The USD/CHF pair rose today as traders waited for US nonfarm productivity and unit labour costs. The pair reached a high of 0.9935, which is higher than the 14-day and 28-day moving averages. The price is slightly above the 14-day and 28-day moving averages. It is also above the 61.8% Fibonacci Retracement level. The RSI has moved closer to the overbought level. The pair may continue moving up to complete the forming cup and handle pattern.