British pound and euro rise after strong flash PMIs
The British pound rose against the US dollar after mixed economic data from the UK. Earlier today, data by the Office of National Statistics (ONS) revealed that the country’s retail sales declined by 8.2% on a month-on-month basis and 8.8% on an annual basis. In the same period, core retail sales fell by 8.8% and 3.8%, respectively. On a positive note, preliminary data by Markit showed that the manufacturing and services PMI increased to 54.9 and 49.7, respectively. The composite PMI also rose to 49.8.
The euro spiked against the US dollar after the relatively strong flash numbers from the Eurozone. In a report earlier today, Markit said that the bloc’s manufacturing and services PMI rose to 57.7 and 48.1, respectively. These numbers are early signs that the European Union’s economy is recovering after the coronavirus-induced lockdowns. In Germany, the manufacturing PMI rose to 60.6 while the producer price index rose by an annualised rate of 0.9%. In France, the composite PMI dropped to 45.2.
Global stocks were relatively mixed today as investors reacted to the rising yields of US treasuries. In Europe, the DAX, FTSE 100, and CAC 40 indices rose by more than 0.50% while in Asia, the Nikkei 225 and Hang Seng retreated. In the United States, futures linked to the Dow Jones and S&P 500 are pointing upwards. The key concern among investors is that the upcoming stimulus will lead to higher inflation forcing the Fed to raise interest rates. European stocks rose because of the positive economic numbers from the UK and European Union.
The EUR/USD rose to an intraday high of 1.2140, which was the highest level since February 16. The gains made today were a continuation of what happened yesterday. On the hourly chart, the price has moved above the 23.6% Fibonacci retracement level. It has also moved above the white ascending channel and the 15-day and 25-day exponential moving averages. Therefore, there is a possibility that the pair will keep rising as bulls target the next resistance at 1.2200.
The GBP/USD price rallied to a high of 1.4000 after the strong manufacturing and services PMI numbers. On the four-hour chart, the price is close to the upper side of the ascending channel. It is also above the 15-period and 25-period exponential moving averages while the signal and main lines of the MACD have moved above the neutral line. Therefore, the pair may continue rising as bulls target the upper side of the channel at 1.4050.
The AUD/USD price made a bullish break-out today. It rose to a multi-year high of 0.7835. This breakout was a part of the cup and handle pattern that was forming. The price is along the upper side of the Bollinger Bands while the signal and main lines of the MACD are above the neutral line. Therefore, the pair may continue rising as bulls target the next resistance at 0.7900.