Forex News: Friday the control belonged to the sellers, who managed to take the pair in close vicinity of the key support at 1.0800. The economic data that came out was close to analysts’ consensus and the impact was limited
The latest bearish momentum is likely to continue through 1.0800 and if this is true, it will be a major victory for the bears. Lately this level rejected price almost immediately after being touched and it has high importance for medium term price action, acting as the lower barrier of the range the pair has been in. A move outside would make the short term bias bearish and would open the door for a touch of 1.0710 during the days to come.
The day’s highlight is the release of the U.S. Manufacturing PMI, scheduled at 3:00 pm GMT. This is a survey of about 400 purchasing managers from the manufacturing sector who are asked to give their opinions on business conditions and acts as a leading indicator of economic health. Higher values trigger US Dollar strength and today’s forecast is 48.6 while the previous was 48.2.
The US Dollar erased all losses occurred during the week and even threatened support Friday but still the weekly session ended with a small bounce higher.
Although the pair climbed above the resistance at 1.4350, this high price couldn’t be sustained and a move lower followed, possibly showing that the downtrend is ready to resume. The 50 period Exponential Moving Average is broken to the downside and today we expect a move into 1.4125. The direction will also be influenced by the economic data scheduled for release so if the impact will be slim, we might see sideways price action, above and below 1.4230.
Similar to the U.S., the United Kingdom also releases manufacturing data today, in the form of the Manufacturing PMI. The indicator comes out at 9:30 am GMT and is expected to show a value of 51.8. Higher numbers strengthen the Pound but the impact is higher if the actual figure shows a hefty difference compared to the forecast.