Never miss a story from David Song

Subscribe to recieve updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from Daily FX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to David Song

You can manage you subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

- U.S. ISM Manufacturing to Hold Steady After Narrowing for Two Straight Months.

- FOMC Minutes to Endorse Gradually Normalization Cycle.

Trading the News: U.S. ISM Manufacturing

ISM Manufacturing

The ISM Manufacturing survey is expected to hold steady in December after narrowing for the past two months, but another batch of lackluster data prints may ultimately fuel the near-term rally in EUR/USD as it dampens bets for higher interest rates.

The Federal Open Market Committee (FOMC) appears to be on course to deliver three rate-hikes in 2018 as officials continue to project a terminal rate between 2.75% to 3.00%, and the December meeting minutes may largely reiterate that ‘economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate’ as the economy approaches full-employment. However, signs of greater-than-expected slack may prompt the FOMC under Jerome Powell to adopt a less hawkish tone, with the central bank at risk of concluding its hiking-cycle ahead of schedule as inflation continues to run below the 2% target.

As a result, market participants may continue to tame expectations for an imminent Fed rate-hike, with the dollar at risk of exhibiting a more bearish behavior over the near-term amid concerns of an inverting U.S. yield curve. Want to following along with key discussions on current market themes and potential trade setups? Sign Up & Join DailyFX Currency Analyst David Song LIVE.

Impact that the ISM Manufacturing survey has had on EUR/USD during the previous print


Data Released



Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)



12/01/2017 15:00:00 GMT





November 2017 U.S. ISM Manufacturing

EUR/USD 5-Minute Chart


The U.S. ISM Manufacturing survey narrowed for the second consecutive month in November, with the index slipping to 58.2 from 58.7 the month prior. A deeper look at the report showed the gauge for factory-gate prices falling to 65.5 from 68.5 in October, with the Employment component edging down to 59.7 from 59.8, while the Production index climbed to 63.9 from 61.0 during the same period.

The batch of mixed data prints sparked a limited reaction in EUR/USD, with the exchange rate coming off the lows to end the day at 1.1895. For additional resources, download and review the FREE DailyFX Advanced Guide for Trading the News to learn our 8 step strategy.

EUR/USD Daily Chart

EUR/USD Daily Chart
  • EUR/USD appears to be on its way to test the September-high (1.2092) as it breaks out of the range from late-2017, with the Relative Strength Index (RSI) highlighting a similar dynamic as it appears to be pushing into overbought territory for the first since the summer months.
  • Keep in mind, a broader bull-flag formation appears to be unfolding, with a break/close above the 1.2130 (50% retracement) hurdle opening up the 1.2230 (50% retracement) region followed by the Fibonacci overlap around 1.2320 (23.6% retracement) to 1.2370 (61.8% expansion).

--- Written by David Song, Currency Analyst

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

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