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The pound sterling ended 2019 with gains but started the second day of the year on negative territories against the greenback. With the improving sentiment around the US-China trade war, traders are looking to pull the pair lower to its support in soon. The pair will most likely hit the support levels in mid-January, right on time of the US President’s announced date for the phase one agreement signing ceremony. The pound’s performance comes along with the weak UK manufacturing PMI. The GBPUSD pair took a sudden U-turn after running on two-week highs as trading conditions still remain thin. Perhaps traders are still accessing the direction of the pair after resting and celebrating the Holidays and the New Year’s Day. Fears of a harsh measure from the European Union if the United Kingdom’s Prime Minister chooses to play tough during Brexit negotiations are also helping keep the British pound lower in trading sessions.
The euro is in for a rough ride against the Australian dollar in the coming sessions. Despite the week figures from Australia’s economic activity, the EURAUD is riding on trade optimism. Traders are expected to look at the Aussie more once the trade agreement between Washington and Beijing is finally inked. Of course, Australia will be affected as China is one of its biggest markets, and if China’s slowing struggling economy finally bounces back after taking hits from Trump’s tariffs, it would mean well for Australia. As of the moment, there is a clear absence of strong and impactful events or reports from Australia, which results in traders looking into different perspectives to buoy it up in the coming sessions. Although, today the pair is edging up because of the series of positive data from the eurozone. But its widely believe that it won’t last long, and the pair will eventually hit its support by mid-January.
Results from their economy’s performance are obviously not the reason for the EURCAD’s descend on trading sessions. Earlier today, manufacturing sectors in the eurozone pumped impressive figures. The German manufacturing PMI rose from 43.4% to 43.7%. Then, the French manufacturing PMI inched up from 50.3% to 50.4%. While the Eurozone’s manufacturing PMI climbed from 45.9% to 46.3%. The Canadian dollar led the pact of major currencies in the last trading session of 2019. It was able to take back the gains of the bloc’s single currency on the last day of the year. And traders are looking to milk the momentum and continue to push the EURCAD pair lower in the coming sessions. However, it’s highly doubted whether the Canadian dollar has the fuel to push the pair past its support levels as the BOC of Canada is expected to ease its monetary policy in its next meeting.
The British pound may have slightly faltered in today’s trading, the pair is expected to surge soon. As the first phase of the trade agreement between the United States and China is scheduled to be inked in Washington on January 15, safe-haven assets such as the Swiss franc will be endangered. The pair could lose its safe-haven appeal in the coming sessions as the tension between the two economic giants starts the ease. Aside from that, another factor weighed is the UK manufacturing PMI which was released earlier today. The United Kingdom’s factory activity contracted from 48.9% to 47.5% in December. The results weighed heavily on the pound. Aside from that, traders are cautious because of the concerns about the European Union lashing out on the Brexit if Boris Johnson fails to reach an agreement with other European leaders. The pair is expected to climb its resistance but it’s still uncertain whether it will be able to break past it or bounce off soon after.