EURO FALLS AFTER WEAKER ECONOMIC DATA FROM EUROPE

The euro declined sharply against the USD after weaker-than-expected numbers from Europe. In Germany, the manufacturing PMI of 51.5 and services PMI of 52.5 missed the consensus estimates of 51.8 and 53.4 respectively. In the EU27 countries, the manufacturing PMI of 51.4 missed the estimated 53.5. In response, Germany’s DAX, EU’s Stoxx and France CAC declined by 118, 30 and 45 points respectively.

These numbers came after the Chinese industrial production numbers fell below analysts’ expectations. In November, production rose by an annualized rate of 5.4%. On the positive side, the country’s unemployment rate decreased to 4.8%. In the US, the country’s retail sales in November rose by 0.2%, which was higher than the estimated 0.1%.

In Japan, data from the Bank of Japan was mixed. The Tankan large manufacturers index of 19 was higher than the expected 17. The Tankan large non-manufacturers index rose to 24, which was higher than the expected 21. This data is derived from a survey of about 1200 businesses in the country. The manufacturing PMI in December rose to 52.4, which was higher than November’s 52.2. Industrial production in October rose by 2.9%, which was better than the estimated 2.8%. In addition, the All Big Industry CAPEX for the fourth quarter rose by 14.3%, higher than the estimated 12.7%.

Sterling declined against the USD today as Theresa May’s trip to Brussels started to disappoint. While she was welcomed well, EU leaders blamed her for coming unprepared. Jean-Claude Juncker and Michael Bairner said that May’s speech had no concrete solutions to the issues. Instead, they blamed her for proposing issues that were rejected during the previous negotiations. Today, EU27 leaders said that they will not renegotiate the deal and asked UK politicians to be responsible and offer a way out. The tough negotiations continued to raise the probability of a no-deal Brexit.

GBP/NZD

The GBP/NZD cross started rising on Wednesday. Since then, the pair has moved from a low of 1.8125 to a high of 1.8600 where it found resistance. Today, the pair moved slightly lower as Theresa May found resistance in Brussels. It is now trading at 1.8515, which is slightly above the 25-day and 50-day EMA. The decline caused the RSI to decline from 75 to the current 53 and is likely to fall further. If it does, the pair will likely test the important support level of 1.8400.

JPN225

The Nikkei dropped today after mixed economic data from Japan and disappointing data from China. The index reached an intraday low of ¥21,246, which was the lowest level since Wednesday this week. Month-to-date, the index has declined by more than 5%. The price is below the 25-day and 50-day EMA. The RSI and the MACD are in the oversold levels. There is a likelihood that the index will continue moving lower. However, the movement will depend on the market happenings during the weekend.

EUR/USD

The EUR/USD pair declined sharply after disappointing data from Europe. This data came a day after the ECB announced that it will end Quantitative Easing. The pair reached a low of 1.1270, the lowest level since November. The price was below the 25-day and 50-day EMA while the RSI moved to below the oversold level of 30. There is a likelihood that the pair will continue moving lower as traders wait for the important Fed decision on Wednesday next week.