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EUR/USD continued to press lower and tested the 1.1112 level after running out of steam around the 1.1175 area during yesterday’s trading activity. Traders have been unable to breach the 1.1185 area this month, a level that represents the 61.8% retracement of the 1.0339 – 1.2555 range. Over the past couple of weeks, the pair has not traded far below the 1.1082 area, representing the 38.2% retracement of the 1.1412 – 1.0879 range. If that level breaks, traders will pay attention to the 1.1064 area, representing the 38.2% retracement of the 1.0879 – 1.1179 range. Eurozone October PMI data will be released Wednesday along with September retail sales. Comments from ECB officials including Mersch and Guindos will also be scrutinised tomorrow. Thursday is an important day in the eurozone with German industrial production and the ECB Economic Bulletin due, along with the EU’s economic forecasts. Fed officials Williams and Evans speak Wednesday followed by Dallas Fed’s Kaplan on Thursday and Fed officials Brainard and Daly on Friday. University of Michigan consumer sentiment data are also due on Friday.
USD/JPY extended yesterday’s gains with traders electing stops above the 108.75 area, representing the 61.8% retracement of the recent 109.28 – 107.89 range. The pair has now been bid for three consecutive trading days and is seeking to reclaim some of the ground it lost last week. The pair’s next upside challenge will be the 108.95 area, representing the 76.4% retracement of the same range. The move lower last week was quite technical as bids emerged around the 107.89 area, representing the 50% retracement of the 106.48 – 109.28 range. Household earning and spending data are due on Thursday.
GBP/USD continued to weaken following last week’s price activity above the 1.2900 figure with traders looking to see how big the stops are below the 1.2874 area,