EUROPEAN session review: Dollar rises

Data released: 

07:00 GMT Germany Producer Price Index (MoM) (Jan) -0.1% 0.2% 0.1% 

07:00 GMT Germany Producer Price Index (YoY) (Jan) -1.1% -0.8% -0.5% 

07:00 GMT Switzerland Trade Balance (Jan) 2,594M 147M 521M 

08:28 GMT Germany Markit Manufacturing PMI (Feb)Preliminar 54.7 56.3 54.3 

08:28 GMT Germany Markit Services PMI (Feb)Preliminar 55.4 53.4 53.1 

08:58 GMT EMU Markit Manufacturing PMI (Feb)Preliminar 53 54 54 

08:58 GMT EMU Markit PMI Composite (Feb)Preliminar 52.7 53.1 52.9 

08:58 GMT EMU Markit Services PMI (Feb)Preliminar 51.7 51.9 51.6 

The dollar rose versus the main currencies after data showed Chinese manufacturing shrank for a second month and Federal Reserve minutes signaled stimulus cuts will continue. 

EURO 

The euro fell, despite the positive data from Germany. 

Preliminary German PMI Manufacturing increased to 54.7 points in February, from 54.3 points in January, according to data released. The result is below market consensus of 56.3 points. PMI Services grew to 55.4 points in February, following a 53.1 point reading the previous month and above expectations of a rise to 53.4. 

Preliminary Eurozone PMI Manufacturing ticked down to 53 points in February, from 54 points in January. Eurozone Services PMI rose to 51.7 points in February, from 51.6 points in January, slightly below market consensus of 51.9 points. PMI Composite slid to 52.7 points, from 52.9 and against forecasts of a rise to 53.1. 

EUR/USD tested $1.3685 support and rebounded to $1.370, below support is on $1.3550 (Feb 2 lows), then - at $1.3480. Below support comes at $1.3400 (Nov 21 lows). Resistance comes at recent high on $1.3770. Above resistance comes at $1.3820 (Dec 30 highs). 

POUND 

The pound dived on the EMU disappointments. 

GBP/USD perfectly tested support on $1.6640. Below support comes at Wednesday’s hourly lows on $1.6500. Initial resistance is at $1.6730 (yesterday’s highs). Strong resistance comes at Monday’s highs on $1.6820. 

YEN 

The yen strengthened the most in two weeks against the dollar as investors sought the safety of Japan’s currency after a gauge of Chinese factory output declined this month. 

Chinese February HSBC/Markit manufacturing PMI came in at 48.3 against consensus expectations of 49.5. The latest reading of the index following the January set of 49.6 indicates Chinese manufacturing is falling further into contraction. 

USD/JPY recovers from session lows on Y102.00. Initial support comes at Y101.20 (Feb 6 lows), then - at Y101.00. Strong resistance remains at Y102.70. Above resistance comes at Jan 31 high on Y102.90/00. 

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