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Forex Price Action Setups (NY Close) May. 1st
USD Rallies, DOW Hits 4yr High on US ISM Data
Data today showed manufacturing grew in April which was its strongest print in 10mos appeasing fears the US economy was heading into troubled times. In the process, the DOW closed up 65.69pts or .5% and the S&Pgained 7.91pts or .57% regaining 1400 as well.
We would like to note Asia and London markets were thin with the May Day holiday so the reaction to the ISM could have been an over-reaction.
Meanwhile, British manufacturing had meager growth suggesting the EU economic slowdown is spreading. While China’s manufacturing showed a strong print from their PMI, Spain will continue to stain the presses and investors minds with an unemployment rate of 24.4%, retail sales declining for 21months in a row, and the total value of the bad loans the Spanish loans being equivalent to 13% of Spain’s GDP.
How long will the party last is a good question. Either the delusional DOW will keep on climbing through money printing/new QE coming, or this rally is going to be sold into oblivion when all this hits the fan.
USDJPY – Forms Piercing Pattern, 80.30 Holds Upside
After a strong 3 day sell-off, the USDJPY has formed a bullish piercing candle. The selling on the 2nd day in this move was the strongest, with solid selling on the 3rd day (monday). But today, the pattern reversed a good portion of the losses from yesterday. Today’s high rejected off the role reversal level of 80.30 which offers bears an intraday level to short, while bulls should wait for a break and hold above this level to get long, or look for a price action trigger around the 79.81 area looking to test the dynamic resistance at the daily 20ema above.
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Upcoming Economic Announcements:
|CNY HSBC Manufacturing PMI||02.30GMT||22.30EST|
|EUR German Unemployment Change||07.55GMT||03.55EST|
|EUR German Purchasing Manager Index Manufacturing||07.55GMT||03.55EST|
|GBP Purchasing Manager Index Construction||08.30GMT||04.30EST|
|USD ADP Employment Change||12.15GMT||08.15EST|
|USD Factory Orders||14.00GMT||10.00EST|
|NZD Unemployment Rate||22.45GMT||18.45EST|
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