News & Data:
The US Dollar strengthened slightly overnight as the weak Chinese PMI print weighed on risk appetite. Asian equities are mostly lower, as well as commodities. AUD/USD reached a high of 0.7905, but then declined to 0.7835 after disappointing Chinese data. Key intraday support noted at 0.7770, while pivotal resistance now lies at 0.80/0.8020. NZD/USD closed the day above the 0.7610 key resistance level, which suggests further gains ahead. The Kiwi Dollar remained very well bid in the Asian session and 0.78 is the next bull target. USD/JPY remains weak and leveraged funds continue to cover existing long positions. The 119.50 support level is holding for now, but a break lower seems imminent. A clear break sub-119.20 would then suggest a move back towards 118.00.
Looking ahead, we have quite a busy econ calendar. In the EU session, we’ll get the Euro Zone Manufacturing/Services PMIs and UK inflation data. Later in the day, the US will release their latest inflation numbers, as well as New Home Sales & Manufacturing PMI data.