Weaker than expected manufacturing PMI in the Eurozone helped squeeze out some of the weaker longs this morning, tripping stops below the 1.3230 level but quickly rebounding thereafter. A well deserved period of consolidation is likely to play out early this morning ahead of the US ISM figures.
Dealers are loaded for bear after yesterday's poor Chicago PMI figure. Prior to the Chicago figures, the market had been looking for a modest rebound to 52.1 from 51.2. Now USD bears are hoping the index breaks below the "magic" 50 level for the first time since April 2003, just after the start of the Iraq War.
Options-related selling is rumored ahead of 1.3300, but will only provide a speed bump for the market if the gloomiest ISM forecasts are born out. 1.3215/20 is important support now on dips. More trailing stops are eyed below on a break. EUR/USD trades at 1.3247.
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