Euro-zone Industrial Production strengthened in November, suggesting that the economy is gaining momentum, with a 1.3% increase on the previous month, better than analysts had been expecting. This adds weight to a building expectation that the ECB will raise interest rates again in the near future, probably at the March meeting.
Oil price are on the up again, with brent crude currently trading around $64.00 per barrell, its highest level in four months. The uptrend in oil prices is still well intact despite the lull in price action we have seen over the last few months, and a continued rise is likely to have knock on effects on world economies.
Sterling fell against the Euro on the Industrial Production figures, and we are once again approaching the crucial 1.4500 level. We are still of the view that this market is likely to break lower.
Sterling also fell against the dollar, and we are close to testing last week’s low at 1.7512.
GBP EUR – Support 1.4500 then 1.4470
Resistance 1.4615 then 1.4680
GBP USD – Support 1.7512 then 1.7485
Resistance 1.7600 then 1.7705
Look out for EMU CPI at 10:00 and US jobless claims at 13:30