Pound halted movement on Tuesday, while euro lost its position due to a technical rebound. Then, yesterday, pound resumed a rally, in part due to the completely empty macroeconomic calendar.
Although preliminary estimates on business activity indices will be released today, the market will not show much movement because the US celebrates Thanksgiving Day. Usually, the global market freezes during holidays, so activity will be low even if the UK service activity index rises from 49.5 points to 49.6 points and the manufacturing index grows from 44.8 points to 45.1 points. The composite business activity index may also increase from 48.7 points to 49.0 points.
In the Eurozone, forecasts appear to be similar, with the service activity index rising from 47.8 points to 47.9 points. The manufacturing index will also grow from 43.1 points to 43.3 points, and the composite business activity index will increase from 46.5 points to 46.6 points.
Pound and euro may strengthen their positions, but the scale may not be very large.
EUR/USD, almost hit 1.0850 during its correction, but it turned around and returned above 1.0900. Staying at this area will likely ramp up the volume of long positions, which, in turn, will open the way towards 1.1000. However, a decline below 1.0850 will prolong the correction cycle.
GBP/USD shows a similar picture, moving to 1.2450 at first, but then returning above 1.2500. Staying at the area will likely lead to an update of the local high, while a fall below 1.2450 will lead to another correction.
