Improved US Manufacturing Would Validate Bearish EURUSD Technical Scenario

Daily Forex Fundamentals | Written by DailyFX | Oct 01 08 11:09 GMT |

Fundamental Outlook The US ISM manufacturing report is expected to show a slight decline to 49.5 from 49.9 as the slowing global economy is expected to weigh on demand. A second month of the sector falling into contraction could lead to an extended downturn, as last month saw a decline in overall activity despite an increase in overseas demand. Europe and Asia heading toward recession and tight credit markets denying firms needed funds for projects. A weak manufacturing report could end the dollar’s momentum as it reminds investor’s that a potential rescue plan will leave an economy with weak fundamentals. However, a better than expected Chicago PMI reading could be a sign that overall activity is stronger than expected which would perpetuate current bullish sentiment. This would validate the technical outlook scenario of another leg lower for the EURUSD. There remain a number of possibilities. While not clearly an impulse, the decline from near 1.49 is deep and accelerating. Remaining below 1.4576 keeps the most bearish count on track (in which a small 3rd wave is down from there). The larger correction scenario is still possible (triangle or flat). Until a break of 1.3877, we can not eliminate bullish potential. 1.4170 may be resistance DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.