US ISM Manufacturing In Focus
Looking ahead to today’s US session, the key data focus will be split between the ADP employment change and the August ISM manufacturing reading. On the manufacturing front, the market is looking for a 58.5 reading, down from the prior month’s 59.5 result. With the US Dollar trading on a weaker footing on Wednesday, a confirmed reduction in factory activity over the month will likely keep USD pressure heading into the NFP release at the top of the week, especially given that this would mark a third consecutive monthly decline.
The rise of the Delta variant as well as period of bad weather over the month are cited as reasons for this forecast. However, if the forecast proves to be wrong and the indicator is seen above 58.5, this could send USD higher into Friday’s data. Of particular note will be the employment component of the data, if this is seen rising, traders could well take it as a sign that the NFP result will come in strong on Friday.
Where to Trade US ISM Manufacturing?
GBPUSD
The latest recovery ahead of the 1.3507 level has stalled into a test of the 1.38 level, with the bearish trend line from YTD highs sitting just above. With price stalled here, any USD strength could well send the pair lower with a break of 1.3676 targeting 1.3507 and 1.3461 thereafter. Indicators are broadly flat here, highlighting plenty of room for any move to gain traction.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.