The EURUSD pair continued its Friday weakness as investors focused on the strong US inflation data. Numbers published by the Bureau of Labor Statistics (BLS) showed that the country’s personal consumption expenditure increased to 4.4% in September. That was the highest number since 1991 and is a sign that the Fed will start turning more hawkish. Besides, the PCE figure is the bank’s favourite measure of inflation. The pair will react to the latest US and Eurozone manufacturing PMI data by Markit and the Institute of Supply Management.
The AUDUSD pair remained under pressure after data from China showed that the manufacturing sector was struggling. Data by the National Bureau of Statistics (NBS) showed that the manufacturing PMI declined to 49.2 in October. This was the second straight month that the PMI has been below the expansion zone of 50. Manufacturers blamed the easing real estate industry, supply shortages, and higher prices for the weakness. The pair also struggled as investors waited for the upcoming interest rate decision by the Reserve Bank of Australia (RBA).
US futures held steady as investors reacted to ongoing corporate earnings. Last week, data by Google and Microsoft showed that the two companies did well in the third quarter as advertising and cloud demand rose. However, data by Apple and Amazon were disappointed as the chip shortage and cost of doing business rose. Data compiled by FactSet showed that about 56% of all companies in the S&P 500 index already published their earnings. Of these firms, 82% have reported better earnings while 76% have reported better revenues. The earnings season will continue this week, with some of the companies that will publish being Franklin Resources, McKesson, Nutrien, Chegg, KKR, Apollo Global, and Mondelez among others.
EURUSD
The EURUSD pair declined sharply on Friday after strong US inflation data. By declining, the pair managed to erase the gains that it made after the ECB decision. It is trading at 1.1558, which is substantially below last week’s high of 1.1692. On the four-hour chart, the pair moved below the 25-day and 50-day moving averages while the MACD has moved below the neutral line. Therefore, the pair will likely keep falling as bears target the key support at 1.1520, which was the lowest level last month.
GBPUSD
The GBPUSD pair declined sharply because of the stronger US dollar. The pair declined to a low of 1.3680, which was the lowest level in 2 weeks. The pair moved below the lower side of the ascending channel shown in green. It has also moved below the short and longer-term moving averages and the 50% Fibonacci retracement level. Therefore, after this bullish breakout, the path of the least resistance is lower ahead of the BOE and Fed decisions.
XAUUSD
The XAUUSD pair declined sharply after strong US inflation data. It declined to a low of 1,773, which was the lowest level since October 16. On the four-hour chart, the pair moved below the lower side of the ascending channel. It also moved below the 25-day moving average and the 38.2% Fibonacci retracement level. Therefore, the pair will likely keep falling as bears target the next key support at 1,700.
