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Thursday, December 1st
In the first winter day the market participants continue to digest the first OPEC output cut deal, witnessed since 2008. Yesterday as it was widely expected OPEC members came to agreement to cut oil production level by 1.2 mbpd to 32.5 mbpd. Saudi Arabia will reduce its output by 486 kbpd while Iraq agreed to cut production by 210 kbpd. The main obstacle remains the involvement of non-OPEC members to cut their oil production. However, in its turn Russia has already agreed to cut its oil output by 300 kbpd. Agreement conditions will be fully implemented by January, 2017 and will remain in force for 6 months. Reacting on that the oil prices have performed significant rally rising on up to 9% and triggering huge risk hunger across the market.
Seems that the euro has recovered a smile today and now is showing better positions in pair with the US dollar. Yesterday the EUR/USD pair fell for more than a cent amid demand for the US dollar and risk-on rally, triggered by higher oil prices. Currently the pair is trading above the level of 1.06, having rebounded from its yesterday’s lows marked at the mid-1.05 level. Today traders will focus their attention on a bloc of Manufacturing PMI’s released by Eurozone, while center stage today will be taken by US ISM Manufacturing PMI.
The yen continues to show weakness today reaching ten-month tops in the pair with its American counterpart. Yesterday the USD/JPY pair broke through its key resistance level of 114 and nearly reached 115 spot on the back of broadly stronger US dollar’s positions and significant wave of risk-on sentiments, triggered by oil price rally. However, seems that the US bulls have taken a breather allowing the yen to recover part of its positions in Asia. Later in NA session US economy will release ISM Manufacturing PMI that will be closely watched for any impact for the pair, while NFP remains the next risky event of this week that will once again assure investors in Fed’s rate-hike in December.
Yesterday the Australian dollar fell sharply unable to benefit from oil price upsurge triggered by the OPEC meeting. However, seems that US bulls have eased the grip allowing the AUD/USD pair to rebound from its yesterday’s lows. Moreover, a set of better-than-expected Chinese Manufacturing PMI’s have also provided extra legs to the Aussie. Nothing much is expected today for the pair except US ISM Manufacturing PMI, while tomorrow traders will see Australian Retail Sales and NFP that will provide the pair with significant impact.
The main events of the day:
German Manufacturing PMI – 10.55 (GMT +2)
UK Manufacturing PMI– 11.30 (GMT +2)
ISM Manufacturing PMI – 17.00 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0488 R. 1.0716
USDJPY S. 111.20 R. 116.16
GBPUSD S. 1.2379 R. 1.2585
USDCHF S. 1.0063 R. 1.0259
AUDUSD S. 0.7294 R. 0.7540
NZDUSD S. 0.7008 R. 0.7206
USDCAD S. 1.3310 R. 1.3526
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