US session review: Dollar at 8-month lows

Data released: 

12:31 GMT USA Initial Jobless Claims (Sep 27) 308K 313K 307K 

14:00 GMT USA ISM Non-Manufacturing PMI (Sep) 54.4 57.4 58.6

The dollar slid to the weakest level in eight months versus the euro as the U.S. government’s partial shutdown added to concern economic growth will slow and prompt the Federal Reserve to delay reducing monetary stimulus.

Ohio Republican John Boehner and other congressional leaders met U.S. President Barack Obama for more than an hour yesterday in Washington. Obama has said he won’t negotiate with Republicans on the budget until they reopen the government and raise the borrowing limit without conditions.

EURO

The euro rose a bit after core euro zone PMI prints were in general better than forecasts.

Dara released showed the services PMI results in the euro area, France and Italy surprised investors in September while the German reading missed the median. 

Next report said EU Retail Sales improved to 0.7% in August versus +0.2% expected. 

However later the euro fell amid correct move after setting 8-moth high.

EUR/USD test closest resistance at $1.3620 (recent highs) with the stronger resistance is near yearly high on $1.3712. Initial support remains at $1.3530 (support line from Sep 6). Below $1.3460 (Sep 25 low) support is around $1.3400.

POUND

Data released showed UK Halifax House Prices grew 0.3% in Septemnber, following a 0.4% increase the previous month. Analysts expected more growth of 0.5%.

On an annual basis Halifax House Prices climbed 6.2% in September, after rising 5.4% in August and below consensus of +6.4%.

Services PMI in the UK economy surpassed expectations at 60.3 vs. 60.0, although the print came in lower than August’s 60.5. 

GBP/USD under pressure after the failed test of Monday’s high at $1.6250 (initial resistance). Initial support is near $1.6150 (channel line from Sep 6), then - at $1.6000 (Sep 26 lows). Above $1.6250 resistance is around $1.6340 (Jan 2 highs) and $1.6480 (channel line from Sep 6).

YEN

The yen stays near days maximum. 

USD/JPY is back to yesterday’s lows on Y97.15. Below Y97.15 support is around Y96.80 (Aug 17 lows) and Y95.80 (Aug 8 lows). Initial resistance comes at Y98.70 (Tuesday’s high), then - at Y99.20 (Thursday’s high) and Y99.65.

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