The USD rebounded strongly on Friday marking strong gains and a four-day winning streak. The gains come on the back of strong patch of economic reports from the US.
Elsewhere, reports from other regions were somewhat weaker in comparison. Late Friday, Trump, once again tweeted that a deal with China was close. This also gave the risk-on rally a modest push.
Euro Slips as Flash PMIs Stay Subdued
The euro was down over 0.41% on the day on Friday. Economic data saw the release of the flash manufacturing and services PMI numbers.
Data showed that manufacturing activity for the eurozone rose to 46.6 in November. This was slightly up from October’s 45.9. Services activity fell to 51.1 from 52.2 in October. IHS Markit data continues to show weak economic growth in the region.
EURUSD Extends Declines, but Support Could Hold
The common currency fell sharply on Friday. Price action is now closer to the support level of the 1.1000 region. This level could hold the declines in the near term and offer a short term respite. But, in the event that the EURUSD breaks down below this level, we can anticipate a retest of the previous lows at 1.0889.
UK Services PMI Contracts in November
The flash services and manufacturing PMI from the United Kingdom saw further deterioration in the economy. The services activity contracted, falling to 48.6 in November. This comes after services activity was at 50.0 in October. UK manufacturing activity was also weak, falling to 48.3, which is down from 49.6 in October.
GBPUSD Breaks Down Below Support
Following the weak reports, GBPUSD fell below the support level at 1.2865. The declines below this level comes after the cable was confined to the range. If the bearish momentum picks up, then GBPUSD could be looking to post further losses. The next lower support is at 1.2768.
Gold Dips on Upbeat US Data
The precious metal was weaker on Friday after a string of economic reports from the United States came out better than expected. The University of Michigan’s consumer sentiment index rose to 96.8. This was higher than the forecasts of 95.8. Meanwhile, flash manufacturing and services PMI numbers from IHS Markit also turned higher.
XAUUSD Back at 1462 Support
Attempts to rally off the support level near 1462 fail as XAUUSD closed back at support on Friday. There is a possibility for a rebound, especially with the Stochastics oscillator currently in the oversold level.
However, if gold falls below the 1462 level, we expect to see the declines pushing the price down to the 1440 handle next.