News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/38gTDn8ejP https://t.co/CjCiVL0C9q
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/S9CEcBm5Qe https://t.co/0gQ60Dd1S5
  • Optimism $GBP https://t.co/UjSo3Dpthr
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.44%, while traders in NZD/USD are at opposite extremes with 70.05%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/n7ePyLk3EB
  • Heads Up:🇧🇷 BCB Copom Meeting Minutes due at 11:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-22
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.13% Gold: -0.34% Silver: -1.88% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/1fgVHj1F6Z
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.12% 🇳🇿NZD: 0.01% 🇨🇦CAD: -0.03% 🇨🇭CHF: -0.17% 🇬🇧GBP: -0.19% 🇪🇺EUR: -0.28% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/2CA80kFhl2
  • Coming up at half past the hour. Do join me if you can, using the link below https://t.co/RAiCJNLuSC
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Germany 30: 1.18% FTSE 100: 0.49% France 40: 0.40% US 500: 0.22% Wall Street: -0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/Jb7LZOruhP
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/UalZ8cRSXB https://t.co/3Wp3IOFbCl
Upbeat ISM Non-Manufacturing Survey to Fuel Bearish EUR/USD Sequence

Upbeat ISM Non-Manufacturing Survey to Fuel Bearish EUR/USD Sequence

2017-10-04 10:00:00
David Song, Strategist
Share:

- ISM Non-Manufacturing Survey to Increase for Second Straight Month.

- Will Chair Janet Yellen Endorse a December Rate-Hike?

- Sign Up for the DailyFX Trading Webinarsfor an opportunity to discuss potential trade setups.

Trading the News: ISM Non-Manufacturing

ISM Non-Manufacturing

Another uptick in the ISM Non-Manufacturing survey may trigger a bullish reaction in the greenback, with EUR/USD at risk of extending the decline from the previous month as it initiates a series of lower highs & lows.

A positive development may keep Federal Reserve on course to deliver three rate-hikes in 2017 as ‘the Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace.’ In turn, Chair Janet Yellen and Co. may relay a more hawkish tone at the next interest rate decision on October 31, but Fed officials may continue to trim the longer-run forecast for the benchmark interest rate as ‘overall inflation and the measure excluding food and energy prices have declined this year and are running below 2 percent.’ In turn, the broader shift in EUR/USD behavior may continue to take shape over the coming months especially as the European Central Bank (ECB) adopts an improved outlook and shows a greater willingness to taper its asset-purchase program.

Keep in mind, Chair Yellen is scheduled to speak later in the day and the central bank head may prepare U.S. households and businesses for higher borrowing-costs as ‘inflation will most likely stabilize around 2 percent over the next few years,’ but a batch of cautious rhetoric may dampen the appeal of the greenback as the Federal Open Market Committee (FOMC) ‘may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation.

Impact that the ISM Non-Manufacturing survey has had on EUR/USD during the last release

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

AUG

2017

09/06/2017 14:00:00 GMT

55.6

55.3

+13

-7

August 2017 ISM Non-Manufacturing

EUR/USD 5-Minute Chart

EUR/USD Chart

The ISM Non-Manufacturing survey fell short of market expectations, with the index advancing to 55.3 in August from 53.9 the month prior. A deeper look at the report showed the gauge for New Orders climbed to 57.1 from 55.1 in July, with the Employment Component rising to 56.2 from 53.6 during the same period, while Supplier Deliveries narrowed for the second consecutive month in August. The mixed details surrounding the ISM survey sparked a rather limited reaction, with EUR/USD consolidating throughout the North American trade to end the day at 1.1917.

How To Trade This Event Risk(Video)

Bullish USD Trade: ISM Non-Manufacturing Survey Climbs to 55.5 or Higher

  • Need a red, five-minute candle following the survey to favor a short EUR/USD position.
  • If the market reaction favors a bullish dollar trade, sell EUR/USD with two separate lots.
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
  • Move stop to breakeven on remaining position once initial target is met, set reasonable limit.

Bearish USD Trade: Gauge for Service-Based Activity Disappoints

  • Need a green, five-minute EUR/USD candle to consider a short dollar position.
  • Implement the same approach as the bullish dollar position, just in reverse.

Potential Price Targets For The Release

EUR/USD Daily Chart

EUR/USD Daily Chart

Check out our EUR/USD quarterly projections in our FREE DailyFX Trading Forecasts

  • Downside targets are back on the radar for EUR/USD following the failed attempt to test the 1.2130 (50% retracement) hurdle, with the near-term outlook capped by the former-support zone around 1.1860 (161.8% expansion).
  • In turn, a break/close below the 1.1670 (50% retracement) region opens up the next downside target around 1.1580 (100% expansion), but lack of momentum to test the August-low (1.1662) may generate range-bound conditions.
  • Interim Resistance: 1.2320 (23.6% retracement) to 1.2370 (61.8% expansion)
  • Interim Support: 1.1390 (61.8% retracement) to 1.1400 (61.8% expansion)

EUR/USD Retail Sentiment

EUR/USD Retail Sentiment

See how shifts in EUR/USD retail positioning are impacting trend- Click here to learn more about sentiment!

Retail trader data shows 38.8% of traders are net-long with the ratio of traders short to long at 1.57 to 1. In fact, traders have remained net-short since April 18 when EUR/USD traded near 1.07897; price has moved 8.9% higher since then. The number of traders net-long is 5.1% higher than yesterday and 0.6% lower from last week, while the number of traders net-short is 1.1% higher than yesterday and 2.8% higher from last week.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES