EUR/USD Pivots at Last Week’s Low - Surprise PMIs End EZ Data Drought
- EURUSD finds support near lows from last week.
- EURGBP might be setting a series of higher lows.
The Euro has been dogged by weak economic data over the past several months, with the Citi Economic Surprise Index having closed last week at -54.1, barely off the yearly low established on October 14 at -57.3. Yet the bevy of today's data releases has served to provoke optimism for the Euro.
The better than expected German PMI data has helped EURUSD find support in the area carved out by last week's lows, and the downtrend seen on intraday charts this week (H1, H4 timeframes) has started to break.
The same technical development can be noted in EURGBP after this morning's mix of better Euro-Zone data and weaker UK data. EURGBP has set a series of higher lows on lower timeframes; and though in the middle of its down channel, we're mindful that a reversal through £0.8065 could mark a significant bottom.
The fuel here, of course, is the stretched futures market positioning. Non-commercials/specs held 155.3K net-short contracts for the week ended October 14, an increase from the 146.2K net-short contracts held a week earlier. Still, market positioning is off its extreme seen in early-September, when specs held 161.4K net-short contracts.
--- Written by Christopher Vecchio, Currency Strategist
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