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GBP & NZD Consolidate Gains Amid Subdued Thanksgiving Trade

  • GBP remains among the best performers in G10 approaching the APAC crossover, with solid November prelim PMI data largely responsible for the early strength. Both manufacturing and services PMIs came in ahead of forecast (manufacturing at 46.7 vs. Exp. 45.0, services at 50.5 vs. Exp. 49.5). GBP/USD rallied to touch 1.2564 in response. The move higher has moderated as the greenback recovered slightly throughout a subdued Thanksgiving holiday session.
  • This week’s gains have resulted in a breach of 1.2506, the Nov 14 high. The break confirms a resumption of the uptrend and maintains a positive price sequence of higher highs and higher lows. Sights are on 1.2589, 50.0% of the Jul 14 - Oct 4 bear leg.
  • AUD and NZD trade similarly strong, with the latter rising 0.4% on Thursday, thanks to the mild weakness across the USD. The USD Index is off yesterday's best levels after the 100-dma successfully contained prices and acted as strong resistance across Wednesday trade. Supportive China headlines also crossed, working in favour of risk assets as markets continue to bake in expectations of sizeable policy support for the property market and housing sector.
  • AUD/USD continues to hold just below the 200-dma of 0.6587 - a level that held well earlier in the week. Clearance here would accelerate the bullish reversal off the October low, putting prices at levels last seen in early August.
  • Friday’s docket will be headlined by German IFO, Canada retail sales and flash PMI’s for the US. ECB President Lagarde is also due to speak at Euro20+, in Frankfurt.

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