The euro was little unchanged in the Asian session as traders waited for flash PMI data from Europe. The preliminary PMI data from Germany is expected to show some improvement in September. The data is expected to show the PMI at 44.0, which is slightly better than the previous 43.5. The services PMI is expected to reduce to 54.3 from the previous 54.8. In the overall European Union, the manufacturing PMI is expected to have improved slightly to 47.3 from the previous 47.0 while the composite PMI is expected to have remained unchanged at 51.9. Later today, German’s Buba will release its monthly report.
The US dollar was unchanged too as traders look forward to a busy week in the United States, where the US is expected to host the UN general assembly. This will be a busy general assembly as the Trump administration continues to confront many challenges, including the ongoing trade war and the reaction to the recent bombings in Saudi Arabia. Today, traders will receive flash manufacturing data from the US. This number is expected to show that the manufacturing PMI remained unchanged at 50.3 while the services PMI is expected to improve slightly to 51.5 from the previous 50.7. The composite PMI data from Markit is expected to decline to 49.6 from the previous 50.7. A PMI reading below 50 is usually seen as a sign of contraction.
Chinese stocks declined after worries on trade returned. This was after the Chinese low-level delegation cancelled planned trips to the American farm belt areas in what was viewed as a goodwill tour. The delegation also cut the meeting short, in a sign that a trade deal might not be near after all. In a statement, the US trade representative office said that the two teams had agreed to continue talks. The Chinese said that the conclusion from the US side was that the two countries were not close to an agreement. In October, high-level talks will continue between the two countries.
EUR/USD
The EUR/USD pair was relatively unchanged in the Asian session. The pair is now trading at 1.1020, which is slightly higher than Friday’s low of 1.0995. On the hourly chart, the pair is trading between 0.0989 and 1.1075. The pair is slightly below the middle line of the Bollinger Bands. The RSI has moved up slightly from a low of 22 to the current 44. Today, the pair will likely react to the flash PMI data from the European Union.
XAU/USD
The XAU/USD pair declined and then pared back losses in the Asian session. The pair is trading at 1515, which is slightly higher than the intraday low of 1510. The current price is slightly higher than the 38.2% Fibonacci retracement level of 1512. On the hourly chart, this price is above the 14-day and 28-day moving averages while the RSI is trading slightly below the overbought level of 70. The pair will likely continue moving higher to test the 50% Fibonacci Retracement of 1520.
GBP/USD
The GBP/USD pair declined slightly as Boris Johnson makes his first trip to the UN general assembly. The pair is trading at 1.2478, which is along the lower line of the channel shown below. This price is also along the 14-day and 28-day moving averages while the RSI has moved from an overbought level of 70 to the current level of 50. The pair will likely move slightly higher to test the previous resistance level of 1.2577. Alternatively, the pair could move below the support level to start a new downward trend.
