Strong Global PMI’s pointed to bullish start to 2017 but stocks were caught a little stretched and we saw reversals in US session. US December Manufacturing PMI was strong at 54.7 vs. 53.2 previously.
US 10yr Yields failed at 2.5% and this sent USD/JPY sharply lower with stocks after an impressive rally at the start of the European session above Y118.
The pullback to Y117.20 has left the market a little jittery and although we have once again recovered the first trading day of the year in Japan is eagerly awaited.
The EUR/USD enjoy no respite with the USD/JPY sell off and has struggled to bounce off 1.0400 with sentiment still negative and expectations of new lows broad in the analyst community.
GBP/USD was unable to sustain any rally as well with a strong PMI print of 56.3 in December vs 53.3 previously shrugged off and the GBP fell to 1.22 in sympathy with the EUR/USD.
AUD/USD attempted to rally in the Asian session on the back of the Private Caixin PMI report from China showing a 2 year high of 51.9 in December but resistance at 0.7250 was too strong we have falling back to safe 0.7200 levels. 0.7170 has held 3 attempts so far so we have a neutral technical outlook right now.
