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The pair found some support in the 0.92 region yesterday and managed to recover some ground. Today will be another big test for the currency with China’s HSBC flash manufacturing PMI due out at 11.45am (AEST). The reading is expected to show an improvement to 48.4 from 48.1. However, judging from the recent performance in China, I wouldn’t be surprised to see yet another disappointment. Selling into strength might be the preferred strategy with resistance in the 0.93 region.
The single currency just continues to languish and will be in the spotlight again today with a raft of economic releases due out of the region. EUR/USD has been sidelined most of the week and is just under 1.37 at the moment. Later today we have manufacturing and services PMIs for France, Germany and the region of which we need to see some strong numbers to prevent a further slide. Additionally the European parliamentary elections commence today and these are likely to cap any euro gains in the short term.
AGO has been beaten down quite significantly recently with pure plays taking a beating on falling iron ore prices. However, yesterday’s bounce in iron ore could spark a relief rally in AGO. Investors will be look to bargain hunt in the sector and this is likely to present some opportunities. From a trading perspective though, the rally might be short lived and therefore taking profits early might not be a bad idea.
While local equities have mostly been struggling and retreating over the past few weeks, TLS has continued to push higher. The stock broke to a fresh nine year high of $5.36 yesterday and a solid uptrend remains in place. Momentum traders could be looking to ride the stock higher while maintaining tight stops.