At the beginning of the week, risk appetite is low amid weak Chinese data on Monday and falling oil prices. What’s more, US data on Monday was a disappointment as well. Expectations for a Fed’s rate hike keep on falling. On Wednesday, watch the non-manufacturing Caixin PMI in China. In the US, pay attention to the non-manufacturing PMI, ADP NFP and the crude oil inventories figures later in the day.
EUR/USD is strengthening for a second day in a row and approached the falling trend line at 1.0950. There is a strong resistance in this area, so beware a pullback. Key support is seen at 1.0810. Euro zone’s economic calendar on Wednesday is rather light, so all eyes will be glued to United States and to the global risk sentiment.
GBP/USD remains highly volatile, once again pulling back from the trend resistance line on weaker-than-expected construction PMI figures. Watch the Services PMI on Wednesday (forecast - 55.4). Key intraday support lies at 1.4350. Generally, the strong bullish Monday candle remains unbeaten, but these levels are bad for buying. Close above 1.4450 could confirm a reversal to the upside.
USD/JPY has also declined from the last week’s highs of 121.70. In the current risk-off mode, demand for the safe yen is expected to stay high. Band of Japan Governor Kuroda is scheduled to speak tomorrow – markets await more comments on the recent BOJ rate cut.
AUD/USD is falling on Tuesday, but the recent rising trend remains in play.Watch the 0.7050/00 support area. As for the economic calendar, Australia is scheduled to releasetrade balance and building approvals data.