Better ISM Data Boosts DXY
The Institute for Supply Management’s (ISM) Manufacturing PMI for June dropped to 51.7 from 52.1 in May but it is better than analyst’s forecasts of 51. The ISM Prices Paid came in at 47.9 below market consensus of 53 for June. It looks like the data can’t support a 50 basis point cut in July, so now I expect a 25 basis cut for this month and another 25 basis point cut before the end of the year. A concern comes from the US construction spending figure that came in worst than market expectations at -0.8% versus 0.0% estimate.
DXY managed to rebound from the previous week low at 95.85 and currently makes an attempt higher after piercing the 50 and 100 hourly moving averages getting a boost from better ISM figure. The positive momentum gains strength but I am looking for a sustained move above 96.79, the 20 day moving average to enter long positions and signal the return of buyers in the index. On the downside immediate support stands at 96 psychological mark while more bids will emerge at 95.85 previous week low.Don’t miss a beat! Follow us on Twitter.