The Philadelphia Fed Index is an important leading indicator, based on a survey of manufacturers in the Philadelphia area. It is based on a survey of manufacturers’ opinions of business activity, and as such provides a snapshot of the business climate and sentiment in the US.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Thursday at 15:00 GMT.
The Philadelphia Fed Index measures regional manufacturing growth. The manufacturing sector is a vital component of the economy and the index provides a useful reading for determining whether the economy is in a growth or contraction phase. An reading which exceeds the forecast is bullish for the dollar.
After registering an 8.7 reading in October, the index was down in November to 3.6, still in positive territory. The forecast for Decmber is 5.1, which would signal modest economic growth.
Sentiments and levels
The EU summit failed to take any drastic action on the debt crisis, and while the recent interest cuts are welcome, they will not solve the crisis. With the US economy showing signs of recovery, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 133.80, 1.3280, 1.3212, 1.3145, 1.3080, 1.30 and 1.2873.
- Within expectations: 1.0 to 9.0: In such a case, EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 9.1.0 to 13.0: An unexpected higher reading can send EUR/USD below one support level.
- Well above expectations: Above 13.0: The chances of such a scenario are low. A second support level might be broken on such an outcome.
- Below expectations: -3.0 to 0.9: A reading close to or in negative territory would push EUR/USD downwards, and one resistance level could be broken.
- Well below expectations: Below -3.0: A reading in deep negative territory would signal a contraction in the manufacturing sector. In this scenario, the pair could break two resistance levels.
For more on the Euro, see the EUR/USD forecast.