Manufacturing PMI for November released earlier showed that activity increased to 52.2 vs and expectation of 51.5 and 52.3 last. A reading of 50 or greater shows economic expansion, while a reading of below 50 shows economic contraction. In addition, consumer sentiment was better than expected. The Michigan Consumer Sentiment for November was 96.8 vs and expectation of 95.7 and 95.5 previously. This is the highest reading since July. The US consumer seems to be quite content at the moment with stocks near all time highs! Stocks and US Dollar pair were unchanged upon the release.
However currently, DXY is trying to stage a late week rally, after an obnoxiously unchanged week. On a 240-minute chart, the DXY appears to be making a charge above support and trying to retest the 50% retracement level from the highs on October 1st to the lows on October 18th, at 98.38. If price pushes through there, the target of the inverted head and shoulders pattern and the 61.8% Fibonacci retracement level of the previously mentioned timeframe comes into place near 98.68.
Source: Tradingview, City Index
As one may expect, as the US Dollar index is headed higher, the EUR/USD is pulling back. The Euro makes up almost two-thirds of the DXY. If EUR/USD can break trough some horizontal support at 1.1030, the 1.1000 is in sight, and so is a confluence of Fibonacci retracement levels near 1.0990 (as well as prior lows). This should prove a tough support area to crack, however if it does, the target for the double top is near 1.0965.
Source: Tradingview, City Index
One thing is certain though after watching the price action this week. Volatility has been extremely low. There needs to be a catalyst to really get these markets moving again. Whether it be Brexit or a US-China trade deal, something needs to happen in order to get the volatility back in the US Dollar currency pairs.
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.