The coronavirus situation in China remains tense, with the number of patients and deaths continuing to grow. Nevertheless, stock markets stabilised after the fall of Chinese stock indices came to an end. Protective assets have fallen in price, and yields on 10-year bonds rose from 1.5034 to 1.5755.
The USD continued to rise against the yen after the publication of a report by the Institute for Supply Management (ISM), which showed that manufacturing activity in the US unexpectedly increased in January. The PMI rose to 50.9 in January, after falling to a revised level of 47.8 in December.
Today’s events (GMT 3):
- 12:30 UK: Markit Construction PMI (Jan).
- 13:00 Eurozone: Producer Price Index (MoM) (Dec).
- 18:00 USA: Factory Orders (MoM) (Dec).
Yesterday's expectations came true. On Friday, the euro rose in price amid the exodus of investors in US bonds and their lower yields. The downwards correction was 76.4% of the growth from 1.1017 to 1.1095. En route to their target, bears will meet resistance at 1.1045, which is likely to be passed. Since the 45th degree is found at 1.1042, we are expecting a correction from it and a drop to 1.1014 in the American session. There is no important news on the calendar, which can majorly influence the euro.