Summary:
- USD turns negative on the day after earlier gains
- The buck this morning hit an 11-month high above 95.00
- Philly Fed comes in well below forecasts
There’s been some interesting moves in the US dollar today with the greenback being met with some selling after earlier hitting its highest level since last July. The USD index (USDIDX on xStation) continues to wrestle with resistance around the 95 handle and looking back this could be seen to be an important swing level for possible resistance.
The USD index has hit an 11-month high today but the foray above the 95 handle was met with some pretty firm selling. Source: xStation
While there is still some way to go before today’s candle closes, at present it is looking a little negative with a possible inverted hammer forming. The current level coincides with the peak seen at the back end of last year and a failure to make a decisive break above 95.10 would open up the possibility of a pullback.
One of the main fundamental reasons for this weakness seen in recent hours was an unexpectedly weak manufacturing print. The Philly Fed manufacturing index fell to a one-and-a-half year low of 19.9 - well below the 28.9 expected and even further beneath the prior print of 34.4.
Philly Fed showed a sharper than expected decline for June and the drop comes not long after a significant decline in the Chicago PMI. These metrics are still high compared to recent years, but could suggest that the good run of manufacturing data is coming under threat. Source: XTB Macrobond
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