European markets began trading on Friday in anticipation of the speech of European Central Bank Governor Christine Lagarde on monetary policy and vision of the situation in the coming period. Mr Lagarde's speech was uncertain, noting that Europe needed more policies to drive growth that had suffered for long periods of time.
The EUR rose strongly against most of the major currencies after investors were hoping for a positive talk Lagarde on the economic conditions before retreating again, especially against the US dollar with the qualification to take further expansionary measures in the coming period on the one hand, and on the other hand the negative economic data recently.
The manufacturing sector in the eurozone continued to shrink since the beginning of the year so far, with the PMI reading at 46.6 points. The Services PMI also showed a lower than expected reading of 46.6 points. Therefore, our negative outlook remains valid for the EUR / USD in the coming period especially if it succeeds in stabilizing below 1.1050 levels which will support its decline to 1.1000.
The wave of negative data continues to penetrate the British economy, which pushed sterling to decline strongly with the continued contraction of the manufacturing sector on the one hand and the contraction of the service sector for the first time to make the chances of slipping the economy into recession, especially as the business sector was negatively affected by the uncertainty caused by the Brexit and elections Parliamentary expected in mid-December. Our bearish outlook remains valid for the coming period as the pair breaks the bullish channel and heads to 1.2800 levels.
Markets will be watching during the hours of retail sales data in Canada which is expected to continue falling behind the series of negative data in Canada and increasing the likelihood of interest rate cuts in the coming period, and the manufacturing sector in the United States of America which will have a strong impact not only on the US dollar but on gold, which was heavily impacted Trump and China have been diverging recently to make uncertainty about trade war developments, but postponing a preliminary deal until later in 2020 has increased, causing gold rallies recently. However, confirming the bullish scenario will first require price stability above $ 1480 per ounce, which would support a rally to 1495 levels.