CURRENCY HIGHLIGHTS – September 2018
The Euro is joining the quiet and low volume environment of the labor day holiday in the United States as the EUR/USD stopped a two negative trading day in a row to perform a positive day at the open of a busy week.
Previously on the day, Markit published its European manufacturing PMI reports. The eurozone manufacturing PMI was unchanged at 54.6 between July and August, in line with expectations.
In Germany, PMI manufacturing declined to 55.9 in August from 56.1 in July. It was below expectations as the market waited for the PMI indexes to remain unchanged.
Remember that all figure above 50 indicates expansion while a sub-50 number shows a contraction in the index.
According to FXStreet analyst Pablo Piovano, the dollar lack of direction is allowing the EUR/USD to make some gains, “looking ahead, the pair is expected to remain under scrutiny ahead of Fedspeak and key releases in the US docket, including Friday’s Non-farm Payrolls, while Italy and the German-Italian yield spread appear to have returned to the investors’ radar.”
After falling 130 pips from August 30 at 1.1720 to trade as low as 1.1585 on Monday, the EUR/USD found support at that level, and it is now attempting to consolidate prices above the 1.1600 area.
The British Pound initially spiked higher during the Friday’s session, breaking above the 1.30 level, but due to stronger job numbers from the US, it gave back the gains. With GBP trying to break higher, the market is likely to be volatile in the next few sessions and will try to rally again. The 1.30 level has a psychological impact on the market, and a break above this level will be a buy and hold situation in the market.
The crucial 0.7150 level was broken in the Friday’s session as USD continued to gain on the back of strong job growth. With this, the market is likely to grind further lower as it has broken the important support level. In the longer term chart, the 0.70 level is the next major support level, and if it breaks down from there, then it is likely to reach the 0.68 level. Overall, the weak momentum is likely to continue and will be sell on rallies market.
The USD rallied higher significantly during the Friday’s session after stronger than anticipated job numbers were reported. The pair in the next few sessions is likely to continue moving higher with strong resistance placed around the 111.50 level and 110.50 level underneath is likely to be a strong support region.
BITCOIN PRICE ANLYSIS – BULLISH AWAKENING
Bitcoin is currently trading between 6.000 and 7.000 USD per Bitcoin.
Technicals suggest a test of the US$10,000 level within the next few weeks, followed by an extended consolidation period before the next bullish markup. Trend indicators on the daily timeframe have flipped from bearish to neutral, while momentum oscillators on the weekly timeframe have begun to flip from bearish to bullish. A BTC ETF decision by the SEC in the month of August was postponed and is expected that could be the catalyst needed to immediately spark price action to the US$10,000 level.