EUROPEAN session review: Pound fell after UK data

Data released: 

08:30 GMT Switzerland SVME - Purchasing Managers' Index (Oct) 54.2 55.5 55.3 

09:28 GMT UK Markit Manufacturing PMI (Oct) 56.0 56.1 56.3 

The euro weakened for a fifth day against the dollar as signs of economic weakness in the single currency bloc fueled speculation the European Central Bank will cut interest rates as soon as next week. 

The ECB last lowered its benchmark rate on May 2 to a record 0.5%. 

EURO 

The 17-nation currency headed for its biggest weekly decline since February after reports yesterday showed the region’s inflation slowed and unemployment climbed to a record. 

The euro has slumped 1% this week. 

EUR/USD probes $1.3510/00. Below support comes at $1.3470 (50%). Initial resistance is near overnight highs at $1.3565, above - near earlier broken support line at $1.3600 and above - at $1.3700 (Oct 18 highs). 

POUND 

Dara released showed the October UK manufacturing PMI edged slightly lower to 56.0 from 56.3 in September (downwardly revised from 56.7) and in line with market consensus. 

GBP/USD remains under $1.6000 after UK Markit manufacturing PMI came in pretty much in line with market forecasts. Below $1.5890 (Oct 16 lows) support comes at $1.5820 (Sep 24 lows). 

YEN 

The yen has compensated morning gains. 

USD/JPY remains within the triangle pattern on the daily charts, limited by Y98.85 - Y97.20 (strong resistance and support respectively). Below Y97.20 support comes at Y96.55 (Oct 7 lows) and Y95.80 (Aug 8 lows). Resistance is around recent highs on Y98.60 (yesterday’s high) and then - at Y98.85. 

DATA AHEAD 

US Markit Manufacturing PMI due at 13:58 GMT and 14:00 GMT ISM Manufacturing PMI (55.5 vs 56.2).

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