US PMI’s Up Next
The main data focus today will be the release of the US flash manufacturing and services PMI’s for June. On the manufacturing front, the market is expecting the release to drop back to 61.5 from 62.1 prior. On the services front, the market is expecting a drop to 70 from 70.4. While both margins are slim, if a deterioration is confirmed, on the back of Fed chairman Powell’s comments yesterday, we are likely to see USD continue lower. On the other hand, a strong reading might help turn the favour back towards USD, though this would likely require a significantly higher-than-expected set of results. Given ther low expectations and the broader reopening which has occurred over June, there are upside risks into this release, however.
Where to Trade US PMIs?
The USDCHF breakout trade from last week moved above its initial target at .9189 but price is now stalling, having dropped back below the level. If today’s day comes in well above expectations, this could help reignite the trade, taking price higher towards the next target at .9288, supported by both MACD and RSI. However, if today’s data is weaker than expected, we could see further give back towards the .9095 level next.