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. See our updated Privacy Policy here.

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
Subscribe
Please try again
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/1xhewkdV21
  • (USD Weekly Tech) US Dollar Dominant Uptrend Back In Focus: EUR/USD, USD/JPY, NZD/USD, USD/CHF https://www.dailyfx.com/forex/technical/article/special_report/2021/09/20/US-Dollar-Dominant-Uptrend-Back-In-Focus-EURUSD-USDJPY-NZDUSD-USDCHF.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/IpwzBGCi7P
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/qv8keXFzHZ
  • Join @IlyaSpivak at 22:00 EST/2:00 GMT for his cross-market weekly outlook webinar. Register here: https://t.co/MKGHc9ae64 https://t.co/JMlT0Wn3DK
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/sbejkd7XT5
  • *Reminder: Weekly Strategy Webinar Monday morning at 8:30am ET - https://t.co/lxd5fZnn4H Mid-Week Market Update on Wednesday at 9:30am ET - https://t.co/8SFBJxNZrA
  • Are you new to trading? Technical analysis of charts aims to identify patterns and market trends by utilising different forms of technical chart types and other chart functions. Get a refresher on technical analysis or begin building your knowledge here: https://t.co/qV3c7a4YR3 https://t.co/CJR61cljOe
  • (AUD Weekly Tech) Australian Dollar May Wilt, Downtrends Resume: AUD/USD, AUD/JPY, AUD/NZD, AUD/CAD https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/09/19/Australian-Dollar-May-Wilt-Downtrends-Resume-AUDUSD-AUDJPY-AUDNZD-AUDCAD.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/DedoOKJMXh
  • Entry orders are a valuable tool in forex trading. Traders can strategize to come up with a great trading plan, but if they can’t execute that plan effectively, all their hard work might as well be thrown out. Learn how to place entry orders here: https://t.co/1mnOXUuBpt https://t.co/GQB0ic9Ahe
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/lx3cMSpZNc
January ISM Manufacturing PMI Misses Expectations, USD Remains Strong

January ISM Manufacturing PMI Misses Expectations, USD Remains Strong

Izaac Brook,

ISM Manufacturing & US Dollar Talking Points:

  • ISM Manufacturing PMI for January prints at 58.7 versus forecast of 60.0
  • Manufacturing sector remains better positioned to handle rises in Covid cases
  • Economic data releases have taken a back seat to volatility and retail-driven speculation
Advertisement

January ISM Manufacturing PMI Misses Expectations, USD Remains Strong

US manufacturing activity in January slowed compared to the previous month as the ISM Manufacturing PMI printed at 58.7 versus a forecast of 60.0. December’s print at 60.7 versus a forecast of 56.6, marked a high for the year despite a resurgence in Covid cases lending evidence to the suggestion that manufacturing has learned to cope with Covid. January’s miss may threaten that view.

ISM Manufacturing PMI, Yearly, January PMI, ISM, Bar Chart, Bloomberg

Manufacturing PMI serves as an important proxy for US GDP data, giving markets a closer and more timely look at an important component of the US economy. PMI prints above 50 denote an expansion and below 50 denote a contraction.

The ISM Manufacturing PMI fell into contractionary territory in March and bottomed in April. It remained contractionary in May as reopenings began and before crossing into expansionary territory in June, where it has since remained. January’s print at 58.7 marks a decline in activity since December but remains at the higher end of the pandemic range for the print.

While manufacturing continues to fare well despite rising Covid cases, the aggregate US economy continues to struggle. Durable Goods orders for December printed at their lowest level since April and consumer sentiment remained weak in January. January’s Services ISM prints on Wednesday and will give markets a closer look at the most important component of the US economy.

On the economic policy side, January’s FOMC meeting saw little change in the Fed’s stance. While the Biden administration has announced details surrounding a $1.9 trillion fiscal stimulus package, bipartisan cooperation on further economic relief looks less and less likely. GOP members have recently proposed a much smaller $618 billion relief plan, opening the door to prolonged debate and negotiation. Although vaccine rollouts offer a light at the end of the tunnel, logistical hurdles and challenges still need to be met. In the meantime, the virus has continued to spread.

US Dollar Price Chart: 5 Minute Time Frame (Feb. 1, 2021)

January ISM Manufacturing PMI Misses Expectations, USD Remains Strong

Chart Prepared by Izaac Brook, Source: TradingView

January’s Manufacturing PMI had little impact on the US Dollar. The DXY dropped slightly but continues to hold around 90.85, near its January highs. The DXY bottomed in early January around a two-year low of 89.25 after continued weakness into the new year. It has since rebounded back above 90.00 and has surged towards the end of January amidst heightened volatility stemming from US equity markets. Further moves in the Dollar might be tied to equity market price action this week.

US Dollar Price Chart: 4 Hour Time Frame (Feb. 2020 – Feb. 2021)

USD, US Dollar, One Year, Tradingview

Chart Prepared by Izaac Brook, Source: TradingView

As far as US economic fundamental go, markets are looking towards Wednesday’s January Services ISM and Friday’s January jobs numbers. Globally, Euro-area GDP and inflation prints could have an impact on markets, although expected weakness has already been conveyed by Europe’s central bankers.

--- Written by Izaac Brook, DailyFX Research Intern

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

DISCLOSURES