USDOLLAR trades into resistance ahead of ISM Services PMI release
Further to our previous article, the USDOLLAR daily chart is trading in its bearish channel between it lower blue and red bands. Its RSI is trading below 50 (green rectangle). The longer it maintains on the bearish side of 50, the more pressure will be applied to the greenback. Data out this week has pointed to economic softening:
- Monday – the ISM manufacturing PMI came in at 46.3, under the 47.5 consensus.
- Tuesday – Jolts Job Openings came in at 9.93m, under the 10.49m expected and under 10m for the first time since July 2021.
- Tuesday – Factory orders contracted by -0.7% m/m which was higher than the -0.4% m/m anticipated.
The hourly USDOLLAR chart has traded up on the day but has run into a confluence of price resistance (black horizontal and the R1 resistance pivot). This is ahead of the important ISM Services PMI due at 2:00pm GMT, which is expected at 54.3. A miss here, will add to the weak data and a reaction on the short end of the yield curve will reverberate. To this end, we are looking to see if price reacts off of the resistance and if the trend-following EMAs and momentum-following stochastic cross down (black elipses).
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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