EUROPEAN session review: Pound rose after GDP data

Data released: 

07:00 GMT Switzerland UBS Consumption Indicator (Oct) 1.28 _ 1.56 

07:45 GMT France Consumer Confidence (Nov) 84 85 85 

09:00 GMT Germany Gfk Consumer Confidence Survey (Dec) 7.4 7.1 7.1 

09:30 GMT UK Gross Domestic Product (YoY) (Q3)Preliminar 1.5% 1.5% 1.3% 

09:30 GMT UK Gross Domestic Product (QoQ) (Q3)Preliminar 0.8% 0.8% 0.7% 

11:00 GMT UK CBI Distributive Trades Survey - Realized (MoM) (Nov) 1 8 2 

In Germany, Chancellor Angela Merkel reached a coalition agreement with the Social Democrats. The pact put her on track for a third term leading Europe’s biggest economy until 2017. It also means Merkel will continue her European policies including a rejection of joint liability for euro-area nations’ debt. 

German consumer confidence will increase to 7.4 next month from 7 in November, according to research company GfK AG. The data topped the the median economist estimate that called for a December gain to 7.1. 

EURO 

The euro continues to remain resilient in the near-term to building expectations of further ECB monetary easing. ECB Governing Council member Hansson became the latest ECB member yesterday to leave the door open to further easing noting that “I think it looks like inflation will be towards the lower end (of their target) for some time. 

EUR/USD rose to $1.3611 after breaking above $1.3580 (Nov 19 highs). Initial resistance placed at $1.3620 (61.8% Fibo of the $1.3830 - $1.3300 decline). Now initial support is around $1.3520, then - at $1.3480 (50% Fibo of Thursday’s lows), $1.3400/90 (Nov 13 lows) and $1.3300/90 (Nov 7 lows). 

POUND 

The pound rallied as high as $1.6326 after the UK data released. The UK Index of Services climbed 0.7% in September, after rising 0.6% in August. Market consensus pointed to less increase of 0.4%. 

On an annual basis preliminary UK GDP increased 1.5% in Q3, following a 1.3% rise registered the previous quarter. This result is in line with market consensus. Quarter-over-quarter GDP grew 0.8% in Q3, slightly up from +0.7% in Q2, as expected. 

GBP/USD rose above $1.6300. Above resistance comes at $1.6340 (Jan 2 highs). Initial support is around $1.6180 (channel line from Nov 11), then - at $1.6070 (Nov 21 lows) and $1.5900/90 (Nov 14 lows). 

YEN 

BoJ board member Shirai said that the central bank will not hesitate to provide further monetary stimulus should risks to the economy and prices materialise. 

Shirai said during the last BoJ minutes publication on Tuesday that risks on the economy and prices are titled to the downside. While Shirai said there are a range of options to consider, she did not provide any specifics. 

USD/JPY holds below Monday’s high on Y101.90. Above resistance comes at Y102.60 (channel resistance line from Nov 7), extending to Y103.70 (May 22 high). Initial support comes at Y101.30 (Thursday’s highs), then - at channel line on Y101.00. 

DATA AHEAD: 

At 14:45 GMT Nov Chicago Purchasing Managers' Index will be in ficus, followed by Nov Reuters/Michigan Consumer Sentiment Index at 14:55 GMT and Oct CB Leading Indicator at 15:00 GMT. 

At 23:50 GMT Japan reports Oct Retail Trade.

Source of information>>

More information>>