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USD ISM manufacturing preview: What to expect of USD?

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 2, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The USD is trading flat to negative against the major currencies in early US session ahead of the US ISM manufacturing report, which could show the activity stalled in October.

    Focus on employment and new orders sub index

    The headline figure may rattle USD in case it prints below 50.00 and this would overshadow other sub indices. However, investors would be more focused on employment component and the new orders component in case the headline figure is at or above 50.00.

    An increase in the employment would be read as positive ahead of Friday’s Non-farm payrolls and could lead to a rise in the two-year treasury yield and the US dollar. In such case, the EUR and commodity dollars could come under selling pressure, while Sterling is likely to remain relatively resilient.

    On the other hand, a sharp drop in the employment index would weigh over the USD. The cable could rally, while the JPY could move higher in lint with the treasury prices. Meanwhile, investors would also watch out for the new orders index - domestic and overseas.

    EUR/USD Technical Levels

    At 1.1035, the immediate resistance is seen at 1.1088 (50% of Mar-Aug rally), while support is seen at 1.10. A positive data could lead to a break below 1.10 and push the spot back to 1.0965 (previous day’s low) and 1.0940 (61.8% of Mar-Aug rally). On the other hand, a weak data could push the pair above 1.1088 and trigger a rise to 200-DMA at 1.1109 and 50-DMA at 1.1156.
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