Ahead of ISM Manufacturing as USD Resumes its Fall...

Daily Forex Fundamentals | Written by Crown Forex | Jul 01 08 11:06 GMT |

Ahead of ISM Manufacturing as USD Resumes its Fall...

The negative sentiment for the greenback continues as still investors lack confidence in the U.S economy as they feel that it not performing any better. Today the U.S is releasing fundamentals concerning the manufacturing sector as it is expected to show that the economy is still contracting since costs of raw materials and energy rally are eating through the pockets of businesses and consumers.

The Euro Zone today released its PMI manufacturing for the month of June final reading coming in at 49.2 slightly higher than the prior and projected reading of 49.1 respectively, since the reading is below the 50.0 level the economy is considered to be contracting. As for Germany they released their retail sales showing a great jump for both the annual reading and the monthly reading so this is helping support the EU slightly. There are expectations that the ECB will hike interest rates on Thursday by 25 points as Jean-Claude Trichet is taking a hawkish tone. Today the euro is struggling to break the major support of 1.5730 while trading under a resistance of 1.5775 at 1.5766. The EUR/USD pair recorded a high of 1.5777 and a low of 1.5722.

Despite the U.K economy releasing their PMI manufacturing showing a slip by 4.2 to 45.8 the royal currency is still gaining on the back of the weak greenback. The British pound hit a major support at 1.9896 as it started to form a strong bullish wave working its way upside to reach the psychological level of 2.0000. The GBP/USD is currently trading at 1.9980 while recording a high of 2.0002 and a low of 1.9887 so far.

The unwinding of carry trades still continue in the markets as investors are risk averse in which they sell high yielding currencies and buy low yielding currencies like the yen while stock markets remain to record losses. Using the Stochastic Oscillators on a daily basis we see that the yen in trading in an oversold area as the USD/JPY broke the support of 105.70 successfully and if the downtrend continues, it will hit the next support at the level of 105.00. The pair is currently trading at 105.44 while recording a high of 106.37 and a low of 105.32.

Crown Forex

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