European Open: GBP drifts higher, ISM manufacturing and JOLTS in focus

Whilst GBP as under pressure from talk of tax hikes, GBP/USD remains above a key support level ahead of today’s ISM and JOLTS job opening reports.

Charts (6)

Asian Indices:

  • Australia's ASX 200 index rose by 113.4 points (1.65%) and currently trades at 6,976.90
  • Japan's Nikkei 225 index has risen by 73.88 points (0.27%) and currently trades at 27,661.34
  • Hong Kong's Hang Seng index has risen by 603.04 points (4.11%) and currently trades at 15,290.06
  • China's A50 Index has risen by 280.12 points (2.5%) and currently trades at 11,505.41


UK and Europe:

  • UK's FTSE 100 futures are currently up 43.5 points (0.61%), the cash market is currently estimated to open at 7,138.03
  • Euro STOXX 50 futures are currently up 26 points (0.72%), the cash market is currently estimated to open at 3,643.54
  • Germany's DAX futures are currently up 98 points (0.74%), the cash market is currently estimated to open at 13,351.74


US Futures:

  • DJI futures are currently up 147 points (0.45%)
  • S&P 500 futures are currently up 72.25 points (0.63%)
  • Nasdaq 100 futures are currently up 21 points (0.54%)




China’s manufacturing PMI contracted for a third month, although not as fast as feared. But with China still handing out lockdowns like free samples, it is difficult to construct a bullish case for the sector (and services is likely to have contracted as well). But the less-than-feared print allowed the Aussie to rally ahead of today’s RBA meeting.

The PBOC’s yuan fixing was lower than expected, sending USD/CNY to a 14-year low which left us wondering whether USD/CNH would break to a record high. For now, it seems it was not meant to be as the pair has pulled back from the October high. But it clearly looks supported ahead of tomorrow’s FOMC meeting.  And Beijing appear happy to let their currency slide.

The RBA hiked interest rate by 25bp to 2.85%. This is their highest rate since 2013, there’ll be more to follow – although they seem happy with 25dp increments.


ISM manufacturing and JOLTS job openings in focus

ISM manufacturing is expected to contract for the first time since May 2020. This is a scenario I have mentioned since the beginning of the year, and the reality is it feels a little underwhelming because this global recession has been well advertised. New orders have also contracted 3 of the past 4 months, although ‘prices paid’ are at post-pandemic lows.


What may provide the more volatile reaction is if the JOLTS job openings report. Last month it fell -1.2 million (around -11%) which was its fastest monthly decline since the pandemic. It points to slower demand for employers, which are early warnings signs of a broken employment market. And if we see another dire print today, it could weigh on the dollar and support equities as traders continue to get over excited over a Fed pivot.





GBP/USD 4-hour chart:

The pound was lower yesterday following reports that tax hikes are indeed to come for the UK, over a course of years. But I think many would agree that is inevitable, and not a move limited to the UK.

GBP/USD is trending higher on the 4-hour chart and may have completed a 3-wave correction. It is holding above the 50-bar EMA, 1.1440 support level and is now back above the weekly pivot point. A stochastic buy signal has also formed. The weekly R1 pivot coincides with the monthly R1 and 1.1761 high, making it a potential target for bulls. Altough the interim level to focus on is of course yesterday’s high. A break below 1.1140 brings the weekly S1, monthly pivot point and 200-bar EMA into focus for bears.



FTSE 350 – Market Internals:

FTSE 350: 3914.69 (0.66%) 31 November 2022

  • 229 (65.43%) stocks advanced and 112 (32.00%) declined
  • 1 stocks rose to a new 52-week high, 5 fell to new lows
  • 12.57% of stocks closed above their 200-day average
  • 50.57% of stocks closed above their 50-day average
  • 5.43% of stocks closed above their 20-day average



  • + 9.90% - Helios Towers PLC (HTWS.L)
  • + 6.46% - Wizz Air Holdings PLC (WIZZ.L)
  • + 6.06% - Easyjet PLC (EZJ.L)



  • -6.27% - Petrofac Ltd (PFC.L)
  • -4.64% - Bridgepoint Group PLC (BPTB.L)
  • -4.54% - Oxford Instruments PLC (OXIG.L)



Economic events up next (Times in BST)





How to trade with

Follow these easy steps to start trading with today:

  1. Open a account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.


Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account