The focus of Wednesday European session was largely on the failed German bund auction and mostly weaker economic data, pointing to ongoing contraction in euro zone manufacturing. The German 10-year bund auction was undersubscribed with Germany selling EUR 3.644 billion of 10-year Bunds with a coupon of 2% at an average price of 100.150 and an average yield of 1.980%, suggesting that Germany is not immune to increasing risk aversion in the EZ sovereign debt market.
The EZ manufacturing PMI came in weaker than expected and slumped to 46.4 from 47.1 in the previous month, while the services sector surprised on the upside and rose to 47.8 from 46.4 in October. Still, even with the unexpected rise, which lifted the composite reading to 47.2 from 46.5 in the previous month, the overall reading remain below the 50. The forward-looking components are still weak and Wednesday release suggests further contraction in the months ahead. Euro zone industrial orders were much weaker than expected in September, at -6.4% m/m vs. expectations of -2.7% m/m and revised -1.4% m/m in August.
The negative momentum has put tremendous pressure on the Euro which is poised to break down against the Yen.
The trade – purchase a daily binary option put on a daily close of EUR/JPY below 103.10. The trade trigger has a floor at 102.00.
Signal Summary
Asset : EUR/JPY
The trade : Binary Put Option
Expiry time : End of day
When : on a daily close of EUR/JPY below 103.10. The trade trigger has a floor at 102.00.
Result : Expired in the money
