US Manufacturing Enjoys Strong Growth – EUR/USD Below Support

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A great result of 55.3 points was recorded in the US Manufacturing PMI. This exceeds expectations for a drop to from 53.5 to 51.9 and shows that a rebound in this sector in June. Will we have a strong Non-Farm Payrolls next week?

USD/JPY is above 81 and USD/CHF is challenging 0.85. They were the first to react. This was clearly a “risk on” trade, in which safe haven currencies are sold off in favor of the US currencies. The “riskier” currencies such as the euro and the pound had a slower reaction, but EUR/USD is currently below support. This move still needs to be confirmed.

EUR/USD is at 1.4447, just below the support line of 1.4450. Further levels below are 1.4375 and 1.4282. Above we have 1.4550 which capped the pair earlier in the day. Trading is still choppy, and this could  turn out to be a false break.

For more on the euro, see the euro to dollar forecast.

Update: This looks like a false break: EUR/USD enjoys the “risk on” atmosphere and rises. The dollar is still stronger against the “safe haven” currencies – the yen and the franc.

The manufacturing sector is smaller than the services sector, but this is quite encouraging after a long period that saw only bad news. A hint towards this good figure was supplied by yesterday’s good Chicago PMI.

Just before this release, the University of Michigan published its revised version of US consumer sentiment. It was revised downwards to 71.5 points. A rise from 71.8 to 72 was expected.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.