Article Highlights

  • U.S. ISM manufacturing PMI down from 53.2 to 52.6 vs. 53.1 forecast
  • U.S. construction spending down by 0.6% vs. projected 0.5% increase
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Downbeat economic figures weren’t enough to stop the Greenback from rallying against its forex peers in the U.S. session as risk aversion seemed to be in play then.

Major Events:

ISM manufacturing PMI Instead of just falling from 53.2 to 53.1 as analysts predicted, the ISM manufacturing PMI for July slipped to 52.6 to indicate a much weaker pace of industry growth. The employment component showed a large fall from 50.4 to 49.4 to reflect a reduction in the sector’s workforce while the prices component tumbled from 60.5 to 55.5, suggesting weaker inflationary pressures.

With that, forex junkies are probably adjusting their expectations for the upcoming NFP release, although the non-manufacturing component of the ISM survey could still be factored in later on.

More crude oil weakness The commodity continued to slide in the past few hours, with WTI crude oil dipping close to the $40/barrel level (-3.70%). Speculations of yet another increase in stockpiles and oil rig counts for the week are keeping oversupply concerns in play, dragging Black Crack lower amid slower demand during the summer months.

Major Currency Movers:

USD – The U.S. dollar managed to score some gains against its counterparts, particularly the commodity currencies.

AUD/USD kicked off at .7575 then closed at .7536 on RBA rate cut expectations (-0.51%), NZD/USD is down from .7192 to a low of .7164 (-0.39%), USD/CAD popped up from the 1.3070 area to a high of 1.3127 (+0.43%), GBP/USD slid back down from a high of 1.3221 to a low of 1.3173 (-0.37%), while the rest of the majors consolidated.

Watch Out For:

  • 1:30 am GMT: Australia building approvals (0.9% expected, -5.2% previous)
  • 1:30 am GMT: Australia trade balance (-2.00B AUD expected, -2.22B AUD previous)
  • 3:00 am GMT: New Zealand inflation expectations q/q (1.6% previous)
  • 4:30 am GMT: RBA interest rate decision (Find out what to expect!)
  • 5:00 am GMT: Japanese consumer confidence index (42.2 expected, 41.8 previous)
  • 6:30 am GMT: Australia commodity prices y/y

See also:

Asian Session Recap

London Session Recap

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