A deluge of economic data will make headlines on Tuesday, with the Eurozone region set to take primacy. Action begins early and will continue for the rest of the day leading into the North American session.
IHS Markit will release several PMI reports beginning at 08:15 GMT. The research institute will report on Germany, France, Italy and the 19-member Eurozone through a series of service and composite PMIs. Markit will also report on British PMI early on Tuesday.
The European Commission’s statistics agency is also scheduled to release the latest Eurozone retial sales numbers at 10:00 GMT. Receipts at retail stores are expected to fall 0.7% in October.
In North America, Markit and ISM will each release their own versions of US services PMI. The ISM report is more closely followed by the financial markets.
Earlier in the session, Caixin China reported stronger than expected services sector growth for the world’s second-largest economy. The Caixin services purchasing managers’ index (PMI) rose to 51.9 in November from 51.2 the previous month.
According to the official release:
‘The Caixin PMI readings in November showed the economy has maintained stability and there was no imminent risk of a significant decline in its growth rate. But we should be cautious because the economy may come under rising inflationary pressure at the start of next year due to continued price increases.”
Meanwhile, the Reserve Bank of Australia (RBA) held its trend-setting interest rate at a record low of 1.5%, where it has stood since mid-2016.
The RBA has remained on the sidelines in support of economic growth and inflation. There is currently no timeline as to when policymakers will vote for higher interest rates.
AUD/USD
The Australian dollar rose after the RBA decision, with the AUD/USD exchange rate climbing 0.4% to 0.7643. The upside move came even as the near-term momentum indicators appeared mixed at the start of Tuesday trading. The pair faces immediate support at the 0.7587 level, which also corresponds with the 21 SMA. On the opposite side of the ledger, AUD/USD has breached the 0.7627 and 0.7640 resistances. The next resistance test is likely to come at 0.7675.
EUR/USD
Europe’s common currency slipped at the start of Tuesday trading, with the EUR/USD falling further below the 1.1900 handle. The pair was last seen trading at 1.1874, and faces immediate resistance around 1.1930. A deluge of economic data later in the week could dictate where this pair ends up in the short run.
GBP/USD
Cable was little changed on Tuesday, as investors awaited fresh trading catalysts later in the day. The GBP/USD exchange rate was last seen holding steady around 1.3472 after slipping from two-month tops above 1.3500. That level continues to offer strong psychological resistance. On the support side, cable is likely to find demand around 1.3430.
