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The greenback traded in a softer manner on Friday along with Treasury yields to end the week. The UK GDP posted a surprise growth in the second quarter printing an unexpected 0.2% QoQ. Pound recovered ahead of UK Prime Minister and Chancellor’s scheduled meeting with the Office of Budget Responsibility. EU ministers will be meeting in Brussels on the energy crisis. Chinese Manufacturing sector surged to a surprising growth in September.
GBPCHF rallied by +0.55% early European session despite struggling to hold on to gains post positive GDP. The sterling got buoyed by upbeat GDP data which showed that the UK economy grew by 0.2% in the second quarter. On a yearly basis the economy grew 4.4% against 2.9% expected. The Switzerland’s KOF leading indicator surged to 93.8 beating expectations of 84.5 and a previous print of 93.5. This along with unchanged Retail Sales [YoY] at 3.0% could pin down the pound. Up from 1.0800 the pair`s rally could be capped by 1.1000 and 1.1120 in the near term.
USDZAR slumped by -0.34% ahead of US PCE data. The US Core Personal Consumption Expenditure will be due in the New York trading hours and expectations have set the index at 0.5% which is higher than the previous reading. The South African trade balance will be released later in the day which will be key to knowing the health of the country’s economy. The pair is currently nursing its earlier wounds and has rebounded at 17.800 support and bulls may face a challenge at 18.200 near term resistance. A further slide may give bears 17.32045.
EURGBP fell by -0.47% in the aftermath of mixed euro area data. The EU inflation data surged to 10.00% in September against 9.1% previous reading and expectations of 9.7%, reinforcing the hawkish stance of further tightening by the ECB. The Italian and French CPI came in at 8.9% and 5.6% respectively on an annualized basis. The number of unemployed persons in Germany declined to 14K vs 20K surveyed in September although the unemployment rate remained unchanged at 5.5%. Surprise economic growth in the UK lifted the sterling against the euro. The pair got rejected at 0.8850 support-turned- resistance and is a few ticks away from 0.8720 support.
European stocks were trading higher to end the week helped by better-than-expected GDP data. The FTSE100 gained +0.48% after establishing a low at 6840. Bulls may need to break above 6960 to stage an extended move to 7000 and 7130. The CAC40 surged by +0.54% trading between 5650 support and 5755 resistance. The DAX in German rose by +0.13% from 11 920 with a bullish cap at 12300.
US stock futures traded in positive regions on Friday. The DJIA index futures were up +0.7% trading between 29089 intraday support and 29500 resistance. The S&P500 futures gained +0.15% after printing a low at 3627 and a high at 3680. Further down bears may target 3600. Nasdaq100 futures pocketed +0.10% mid-European session. Up next from the 11280 intraday resistance is 11 400 psychological level.
The metals market was trading in positive regions as the market mood was better on Friday. XAUUSD trimmed its earlier gains and is now up +0.20% being lifted by easing treasury yields and a softer dollar. However, the hawkish Fed could limit upside movement. As of writing the yellow metal was trading at $1664 and is still capped by $1680. Silver was up +1.01% moving between 18.800 and 19.200.
