Despite of the market friendly result from the first round of French Presidential election, the EUR/USD pair failed to build on weekly bullish gap and settled below the 1.0900 handle. With markets now pricing-in Emmanuel Macron's victory in the run-off on May 7, a fresh wave of greenback selling interest helped the pair to regain some fresh traction on Tuesday.
Near-term action remains unchanged and holding within 1.2770/1.2859 consolidation range under last week's fresh multi-month high at 1.2904. Strong support has formed at 1.2770 (consolidation range floor, also former high of 06 Dec) where repeated downside attempts were contained. The downside is reinforced by 1.2755 (Friday's spike low/Fibo 38.2% of 1.2513/1.2904 upleg), however, risk of deeper pullback remains in play as slow stochastic is turning down on daily chart, after reversing from overbought territory.
The EUR/USD pair witnessed a bullish gap opening on Monday surged to the highest level since Nov. 11 as investors welcomed Emmanuel Macron emerged as a winned of the first round of French Presidential election. Centrist Emmanuel Macron qualified for a May 7 run-off alongside the second-place finisher, far-right leader Marine Le Pen. Having scaled multi-month tops, decisively beyond the very important 200-day SMA, the pair pared some of its strong gains and retreated around 100-pips from highs.
The EUR/USD pair once gained some fresh traction near the very important 1.0600 support area and traded with positive bias at the start of a new week. After a lackluster start, the pair caught some fresh bids amid some renewed weakness surrounding the greenback, in wake of Friday's disappointing US macro data - monthly retail sales and the latest CPI print. Adding to this, rising tensions between the US and N. Korea continues to weigh on the buck and supported the Euro's funding currency status, helping the pair to continue defending the year-to-date ascending trend-line support.
The EUR/USD pair struggled to register any meaningful recovery from one month low touched during early Aisna session and continued trading with mild negative bias below the 1.0600 handle through early European session on Monday.
The GBP/USD pair fall sub-1.2500 following the release of the UK Markit manufacturing PMI for March, which came in at 54.2, a four months low, against February's 56.2 and the expected 55.1. Still, the number indicates that the UK manufacturing sector remained solid at the end of the first quarter, according to the official releases, although the rate of expansion slowed. The GBP/USD pair eased to a daily low of 1.2491 after the news, hovering now around the 1.2500 figure.
The GBP/USD pair peaked at 1.2515 earlier in the day, retreating modestly below the 1.2500 threshold, ahead of the release of the UK Retail Sales figures. Data beat expectations, and the upward surprise boosted the Pound. Sales surged by 1.4% in February and when compared with the previous month, while year-on-year sales surged by 3.7%. Excluding fuel, sales also surged, by 1.3% and 4.1% monthly and yearly basis respectively. January figures suffered downward revisions.
Following a quiet Asian session, the greenback gains some ground against its major rivals, underpinned by news coming from the UK, as the Pound fell following news showing that the UK Government will trigger the Brexit next March 29th. The macroeconomic calendar has remained extremely light at the beginning of the week, with only Germany releasing its February PPI data, in line with expectations monthly basis, and up year-on-year to 3.1% from previous 2.4%. There's not much ahead after Wall Street's opening, except for a speech from Fed's Evans mid US afternoon, and another from US President Trump early Asia.
In the latest Brexit development, the House of Commons turned down the amendments passed by the House of Lords and passed the Brexit bill, allowing the UK PM Theresa May to trigger Article 50 and formally begin the process of ending the country’s association with the European Union. Meanwhile, Scottish First Minister Nicola Sturgeon confirmed that she would ask for permission to hold a second independence referendum.
Investors are favoring the greenback this Tuesday, as poor data coming from Australia and the UK Parliament granting PM May permission to trigger the Brexit with no amendments, weighed on high-yielding assets. The EUR/USD pair, however, remains reluctant to ease much, holding around the 1.0630 region, a previous strong resistance, and now support.
Majors saw little action overnight, as the first of the two events that will set the tone for currencies looms. The European Central Bank is having is monetary policy meeting this Thursday, and the Central Bank is not expected to introduce changes to the ongoing policy, but as usual, hopes are on Draghi's speech. The market is expecting for a more optimistic stance from policy makers, and for upgrade in growth and inflation forecasts amid the latest macroeconomic releases in the EU that indicate a healthy recovery since late 2016.
The EUR/USD maintains the positive momentum seen late Friday, after Fed's Yellen pretty much confirmed a rate hike for this March. The pair extended its advance up to 1.0639, a fresh 3-week high, although there's no follow-through and the pair hovers around the 1.0620/30 region. Local share markets are trading with a downbeat tone, helping the common currency to advance.
The EUR/USD pair trades marginally higher this Monday, but with little upward momentum and within a limited range, as a scarce macroeconomic calendar kept majors limited during the Asian session. Things will get more interesting mid European morning, as the EU will release its confidence figures for February, while ahead of the Wall Street opening, the US will release Durable Goods Orders for January, and later, some minor housing and manufacturing figures.
The Pound weakened against all of its major rivals ever since the day started, undermined by news reporting that the UK Government is preparing for a potential Scotland independence referendum. Scottish PM Nicola Sturgeon has said that a referendum is "highly likely" now that the UK has decided to break with the EU. There are no official comments on the matter, but the news were enough to send the GBP/USD pair down to 1.2383.
The EUR/USD pair fell down to 1.0497, right after London's opening, barely recovering some ground after the release of the German IFO survey. Business sentiment rebounded in February with the index up to 111.0 from previous 109.8, with the assessment of the current situation up to 118.4 and expectations also on the rise, up to 104. Euro area annual inflation was 1.8% in January 2017, up from 1.1% in December 2016, down monthly basis by 0.8%, as expected.
The week starts in slow motion with the US on holidays and a scarce macroeconomic calendar. Around stocks, so far is risk-on day, with Asian equities trading modestly higher and European ones gapping higher at the opening. The EUR/USD pair is confined to a measly 30 pips range since the opening, barely above the 1.0605 low posted last Friday, despite better-than-expected PPI in Germany. In January, the index of producer prices rose 0.7% from December, and by 2.4% when compared to January 2016. The EU will release its February preliminary Consumer Confidence data, expected to have declined from -4.7 to -4.9, whilst there won't be releases coming from the US.
The Pound is outperforming its major peers against the greenback, advancing up to 1.2482 after London's opening, and trading not far below the level. The UK released its Rightmove house price index overnight, which came in better-than-expected, up by 2.0% in the month from previous 0.4%. Still, the index is hardly a market mover, and there was no fundamental trigger for the intraday advance.
The American dollar started the week firm against its major rivals, helped by a soft reading of the Japanese Q4 GDP, which sent the USD/JPY pair up to 114.16. The EUR/USD pair fell to 1.0611 during the Asian session, but bounced back ahead of London opening, trading now near a daily high of 1.0657.
The dollar is back in fashion, rallying against all of its major rivals with political uncertainty weighing on European currencies. After officially lunching her bid for the French presidency, Marine Le Pen, the leader of the French far-right Front National party, promised that, if elected, her party would pull France out of the European Union, and fight radical Islam.
The EUR/USD pair retreats from a daily high set at the beginning of the day at 1.0790, trading near a daily low of 1.0742, with European equities under pressure, but commodity-related ones are still strong against the greenback. Germany released December Factory Orders so far today, indicating an increase of 5.2% monthly basis, the most since 2014, and of 8.1% when compared to a year before. The data is quite encouraging, as it confirms the strong economic expansion of the country suggested by previous macroeconomic releases. The EU Sentix Investor Confidence Index for February came in at 17.4, matching expectations.
The greenback is modestly higher against the EUR, with the pair trading around 1.0745, despite another round of encouraging data coming from the EU. The final January services and composite Markit PMIs for the EU ticked higher from initial flash estimates, with the services PMI reaching 53.7 and the composite up to 54.4. German and French figures also beat fists estimates, while Italian and Spanish figures were revised lower. The dollar is benefiting from easing risk aversion, as stocks trade in the green across Europe, although a cautious mode persists ahead of the release of the US Nonfarm Payroll report.