Summary:
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Non-manufacturing ISM beats expectations
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Nasdaq (US100 on xStation5) fails to break above the 7100 pts handle
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S&P 500 (US500) once again concedes to 21-session moving average
Another set of the US data has been released recently. The final PMI readings were neither surprise nor disappointment and therefore no major reaction was observed on the markets. The non-manufacturing ISM reading continued recovery in June moving to the highest level since March. Moderate gains are observed on Wall Street in the first trading hour.
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The non-manufacturing ISM index diverged from the PMI services gauge in June. Source: xStation5
After ADP report and weekly jobless claims data the time has come for the non-manufacturing ISM reading. The headline figure moved from 58.6 pts in May to 59.1 pts in June. This is another month of recovery after the gauge slipped in March and April. One of the biggest rises was seen in the New Orders and New Export Orders. The former moved from 60.5 pts to 63.2 pts while the latter advanced from 57.5 pts to 60.5 pts. On the other hand, Imports and Inventory Change subindices accounted quite a noticeable declines.
Prior to the ISM non-manufacturing index release investors were offered final PMIs for June. The services gauge came out in line with expectations remaining on the prior level of 56.5 pts. The composite gauge ticked higher moving to 56.2 pts from 56 pts seen previously. However, as it is usually the case for the final readings no major reaction was observed on the markets.
US100 is trading in the vicinity of 33-period moving average. The benchmark rose to 7100 pts yet failed to hold this gains and in turn pulled back towards mentioned technical hurdle. Keep in mind that this moving average managed to limit index’s upside few times (orange circles) in prior weeks therefore investors should remain cautious as history may repeat itself. Source: xStation5
On Wall Street we are observing moderate gains today. US500 (S&P 500 futures underlying) still finds it hard to clearly break above the 8- and 21-session moving averages but it distances itself from the prior swing level near the 50% retracement of the February’s rout. US30 (Dow Jones futures underlying) approaches the 33-period moving average on the H4 interval while Nasdaq (US100) trades in the vicinity of it. Keep in mind that FOMC minutes are scheduled for release at 7:00 pm BST therefore a rise in volatility across US assets may be observed in the evening.
The US500 struggles to overcome moving averages. Do notice long upper wicks of the previous daily candlesticks suggesting that the buyers were defeated in the vicinity of 21-session moving average (yellow line). In case of continuing inability to overcome those technical obstacles a pull back towards the swing level near 50% Fibo level (orange circle) of the February’s rout may be on cards. Source: xStation5
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