Thinking of trading the ISM manufacturing PMI?
This report might contain clues for the NFP, so we might just see big moves from the dollar!
Before moving on, ICYMI, yesterday’s watchlist checked out the uptrend pullback on AUD/JPY. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Eurozone headline flash CPI up from 8.9% to 9.1% vs. 9.0% forecast
Eurozone core flash CPI up from 4.0% to 4.3%
ADP non-farm employment up from 128K to 132K in Aug vs. 300K forecast
Canadian economy grew 0.1% in June as expectedChicago PMI climbed from 52.1 to 52.2 vs. 52.5 forecast
U.S. EIA crude oil inventories fell by another 3.3M barrels
Australia’s AIG manufacturing index slipped from 52.5 to 49.3
Japanese capital spending increased from 3.0% to 4.6% in Q2
Japan’s final manufacturing PMI upgraded from 51.0 to 51.5
Japanese Chief Cabinet Secretary says sudden FX fluctuations undesirable
China’s Chengdu city enters lockdown on COVID-19 cases
Chinese Caixin manufacturing PMI dropped from 50.4 to 49.5 vs. 50.1 consensus
German retail sales rebounded by 1.9% vs. projected 0.1% uptick
Swiss CPI improved to 0.3% after previous flat reading
Spanish manufacturing PMI up from 48.7 to 49.9 vs. 48.5 forecast
Swiss manufacturing PMI fell from 58.0 to 56.4
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. Challenger job cuts at 11:30 am GMT
Canadian manufacturing PMI at 1:30 pm GMT
U.S. ISM manufacturing PMI at 2:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: USD/JPY
USD/JPY 1-hour Forex Chart
Dollar traders must be gearing up for the NFP Friday!
Will today’s set of jobs-related figures move the needle?
So far, leading indicators are giving mixed signals, so your guess is as good as mine.
The JOLTS job openings figure for July indicated a larger-than-expected increase in hiring opportunities, but the ADP figure came in way below expectations.The Challenger job cuts figure and the ISM manufacturing PMI are on today’s docket, with the latter’s employment component likely to generate more market attention.
Another contraction in hiring could mean a downside surprise for the NFP, which could spur losses for the Greenback.
This might be enough for the USD/JPY wedge resistance near 140.00 to hold as a ceiling, possibly sending the pair back down to the bottom. If bearish pressure is strong enough, we might just see a breakdown!
Stochastic is already starting its descent from the overbought region to signal a return in selling pressure while dollar bulls take a break. However, the 100 SMA is still above the 200 SMA to hint that there’s a good chance the wedge support could hold.
If the ISM jobs index comes in much stronger than expected, traders could set the bar higher for the NFP release. This might trigger an upside breakout from the wedge, so watch out!
