In what could become a major initiative, the European Commission, on Wednesday announced that it will take steps to overhaul its fiscal rules.
The commission’s current fiscal rules prohibit member EU states of having a public debt of over 60% of its GDP.
It also enforces a rule to maintain the government deficit below 3%. The move could finally see much needed fiscal reforms as the economic bloc battles with sluggish growth.
Eurozone Services PMI Surprises to the Upside
The services PMI in the eurozone for January came out above estimates at 52.5. This was an increase from 52.2 in December. Economists forecast that the services PMI would remain at this same level.
In a separate report, eurozone retail sales were down 1.6% in the last month of 2019.
EURUSD Touches Down to 1.1000 Support
The currency pair finally slipped to test the 1.1000 level of support. This comes amid a steady bearish momentum in price action. The decline to this support could see some bounce amid a bit of profit-taking.
However, any correction could be limited below the 1.1072 region for the moment.
UK Services PMI Beats Estimates
The services PMI report from the UK, as reported by IHS Markit, showed a solid print. Services sector activity rose to 53.9 in January, beating estimates of 52.9.
In December, the services PMI was at 52.9. The increase in the services sector underlines a similar trend across the construction and manufacturing sectors during the month.
GBPUSD Bounces Off Support
The currency pair fell once again to the support area of 1.2960. However, prices were rejected strongly for a second time.
As mentioned previously, the currency pair will need to establish firm support at this level in order to maintain any gains. The current rebound will keep price action limited below the 1.3100 level.
US Private Payrolls Rise More than Forecasts
Private payrolls firm ADP released the monthly payroll figures. According to the data, private-sector hiring surged strongly in January to 291k during the month. This was well above the estimates of 157k.
The data for December was revised down to 199k, with the surge coming on the back of a rebound in the manufacturing sector.
XAUUSD Rebounds, But Will It Hold?
The precious metal stalled in its declines from earlier this week amid a rebound. But the question remains if this corrective move can hold. Currently, the nearest resistance level is around the 1568 – 1572 region.
A test of resistance here could see prices moving lower once again. To the downside, a decline below the current pivot lows of 1548 could signal a move to the 1534 support.