Euro bounces after strong Eurozone manufacturing PMIs
The euro bounced back against the US dollar as traders reacted to the mixed economic data from the region. In a report, the German bureau of statistics said that the country’s unemployment rate declined from 6.2% in October to 6.1% in November, even as the country continued to deal with the new wave of the pandemic. The unemployment change also dropped by more than 39k in November. However, the country’s manufacturing PMI declined from 57.9 to 57.8. In another report, data from Markit showed that the Eurozone’s manufacturing PMI increased from 53.6 in October to 53.8 in a sign that the bloc’s economy is doing well.
The price of crude oil wavered today as the market focused on the strong global manufacturing data and the postponed OPEC+ meeting. According to Markit and Caixin, the country’s manufacturing PMI rose from 53.6 in October to 54.9. That increase was better than the official government PMI reading of 52.1 that was released yesterday. Ideally, a strong PMI is usually a sign of high demand for crude oil prices. At the same time, traders reflected on the OPEC meeting, which was postponed yesterday after members disagreed on the extension of the cuts.
The Australian dollar turned lower even after strong China manufacturing PMI and the hawkish RBA interest rate decision. In its final decision of the year, the bank decided to leave interest rates unchanged as most analysts were expecting. The bank also left the yield curve control, quantitative easing, and term lending programs intact. Further, the governor said that the bank will retain interest rates at the current level for at least three years.
The EUR/USD is trading at 1.1968, which is higher than yesterday’s low of 1.1923. The price is nonetheless lower than the intraday high of 1.1985. On the hourly chart, it is above the 25-day exponential moving average and along the ascending yellow trendline. The RSI is below the overbought level of 70. Therefore, the pair will likely continue rising during the American session as bulls attempt to retest the 1.1985 level.
The AUD/USD pair dropped to an intraday low of 0.7347 after reaching an intraday high of 0.7372. On the four-hour chart, the current price is along the lower line of the yellow ascending channel. It is also along the variable index dynamic average and slightly below the 28-day moving average. The pair also seems to be having a bearish build-up, which raises the probability that it will move below the support and possibly to 0.7330.
The XTI/USD pair is little changed today as the focus remains on whether OPEC and its allies will reach a deal on supply cuts extension. The pair is trading at 45.35, where it has been since yesterday. It is also above the blue 50-day moving average. Oscillators are also calm, with the Relative Strength Index (RSI) being at 57. The Average True Range (ATR) is also wavering. Therefore, the pair will likely experience a major breakout in the near term. The key support and resistance levels are 44.50 and 46.35.