The good news continue to flow from the US: ISM Non-Manufacturing PMI scored 57.1 points, significantly higher than 55.6 that was predicted. This gives an additional boost to the greenback, with EUR/USD aiming for the next support line.
Expansion of the services sector is now in line with that of of the manufacturing sector – yesterday’s Manufacturing PMI also had the same score, but this time it was in line with expectations. The strong expansion of the services sector, and especially employment in this sector, is critical for the US economy that has lots of service jobs, and raises hopes for a good Non-Farm Payrolls figure on Friday.
Regarding jobs, the ADP Non-Farm Employment Change showed a gain of 297,000 jobs in the private sector, triple the early expectations. Up to now, the economic recovery was only seen in GDP figures, and wasn’t felt in the most painful spot – jobs. We’re now seeing it picking up. This continues a trend seen in the weekly jobless claims, that dipped under 400K last week.
The Euro, which enjoyed a nice ending to 2010 and also an OK start to 2011, is now surrendering to the greenback’s strengt
h, that is raging across the board. After the ADP report sent it below the important 1.3180 line, the Services PMI sends it deeper, now in sight of the next support line, 1.3080, which is even more important. This 100 pip range is now the key.
For more technical levels and events, see the EUR/USD forecast.
The yen also loses to the US dollar, and so are the pound and the Aussie – AUD/USD is now under parity.