By Lukman Otunuga, Research Analyst, ForexTime
The Dollar was close to surrendering all of Thursday’s gains after US Manufacturing PMI figures missed market expectations by falling to 51.2 last month.
American manufacturers grew in July at the slowest pace in three years thanks to US-China trade disputes hitting exports and eroding global growth. With manufacturers in the world’s largest economy caught in the trade war crossfire, expectations are likely to mount over the Fed coming to the rescue. This sentiment is being reflected in the Dollar Index which is retreating from a two year as of writing. Where the DXY concludes this week will be heavily influenced by the US jobs report on Friday.
Focusing on the technical picture, the Dollar Index has turned bullish on the weekly charts. The solid breakout above the 98.20 resistance level should open the doors towards 99.00 and 100.00.
Alternatively, an intraday breakdown below 98.50 is likely to encourage a move back towards 98.20. Should 98.20 prove to be unreliable support, prices have scope to sink back towards 97.00.
EURUSD crumbles to fresh 2019 low
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An appreciating Dollar is offering nothing but pain and punishment for the Euro which is currently trading near a 2019 low at 1.1050.
The currency pair is heavily bearish on the daily charts as there have been consistently lower lows and lower highs. With the Euro fundamentally bearish due to economic conditions in Europe and a dovish ECB, the path of least resistance for the EURUSD points south.
Technical traders will continue to closely observe how prices behave below the 1.1100 level. Sustained weakness below this support should open a path towards 1.1000 and 1.0900 in the near term.
Yen thrives on market uncertainty and confusion
The Japanese Yen has appreciated against every single G10 currency today thanks to uncertainty across financial markets.
Confusion from yesterday’s Fed meeting, concerns over Brexit and lingering global fears have sent investors rushing towards the Japanese Yen. The currency is set to extend gains ahead of the US jobs report on Friday, as investors adopt a guarded approach towards riskier assets.
The USDJPY remains bearish on the weekly charts as there have been consistently lower lows and lower highs. A solid weekly close below 108.00 should open a path towards 107.00 and 106.00, respectively.
AUDUSD attacks 0.6830
The AUDUSD is under pressure on the weekly charts. All bears need is a weekly close below 0.6830 to trigger a decline towards 0.6650.
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Article by ForexTime
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