Dollar Remains Weak After ISM Manufacturing, Swissy Soars

Dollar remains weak in early US session even though ISM manufacturing index posted the third consecutive month of improvement in June. The headline index rose to 56.0, which is slightly better than expectation of staying at 55.0 and was the highest reading since Apr
2006. However, the employment component continued to deteriorate to 51.1. Price paid index also moderated more than expected from 71.0 to 68.0. After all, though solid, the ISM manufacturing report is not spectacular enough to reverse the current weakness in the greenback.

Earlier today, European majors are boosted by stronger than expected Manufacturing PMI from Germany, Eurozone and UK. In particular, Swiss PMI came in much better than consensus expectation and rose from 58.9 to 62.8 in June, versus estimate of 60.0. Further output gains in the Swiss manufacturing industry is anticipated in the coming months. The report is reinforcing speculation of an either a 50bps hike or and earlier than Sep 25bps hike from SNB. The Swiss Franc surges across the board on the data and markets are turning focus to tomorrow’s Jun CPI.


Daily Pivots: (S1) 1.2168; (P) 1.2250; (R1) 1.2294; More.

USD/CHF’s sharp decline from 1.2467 extends further to as low as 1.2098 today, breaking though mentioned 1.2146 support. At this point, intraday bias remains on the downside as long as USD/CHF stays below 1.2105 minor resistance and further decline should be see to retest 1.1993 low. Above 1.2151 will turn intraday outlook consolidative first. but upside should be limited well below 1.2258 support turned resistance and bring another fall.

In the bigger picture, break of 1.2146 support confirmed that rise from 1.1993 has completed with three waves up to 1.2467. Such development revive the case that price actions from 1.1919 is merely a medium term triangle consolidation and could have already completed at 1.2467. Sustained break of 1.1993 low will confirm such case and indicate that whole medium term down trend form 1.3283 has finally resumed for next downside target of 1.1878 low first.

However, note that USD/CHF is still kept inside established range of 1.1878 and 1.2571. Above 1.2239 resistance will indicate that current fall from 1.2467 has completed and turn short term outlook mixed again as consolidation continue to extend inside mentioned range.

USD/CHF 4 Hours Chart - Learn Forex, Trade Forex, Forex News, Forex Headlines

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