Global (FX) markets on Friday tried to assess the impact of the UK Tory victory and of the first phase US-China trade deal. Brexit uncertainty probably moving to the background of the EMU (& UK) political agenda, at least temporarily, initially propelled EUR/USD to the high 1.11 area. The impact of the trade deal was less obvious. Markets still had to guess on the details and President Trump created some doubts on how far the deal was really finalized. EUR/USD reversed an earlier gain to close at 1.1121. Mediocre US November retail sales had only a limited impact on the dollar.
Today, the EMU/German PMIs are expected to confirm a gradual bottoming/improvement inactivity. The expectation is legitimate and could support EMU yields and the euro. However, EUR/USD remains vulnerable if data were to disappoint. The US Empire manufacturing survey and PMIs are also expected to signal a gradual eco rebound. This time, EMU data maybe have some more potential to move EUR/USD. Also, look out whether/to what extent equities continue to profit from the reduced unvent risk. For now, this didn’t hurt the dollar too much.
EUR/USD SHORT (Sell)
ENTER AT: 1.11405