USD Falls As ISM Manufacturing In Contraction – Orbex

Forex Articles For Orbex – The USD lost favor as the economic data on Friday saw a packed day.

The ISM manufacturing PMI for October came in at 48.3, missing estimates of 49.0. This marks the third month of contraction in the manufacturing sector.

The payrolls report was also mixed. The economy added 128k jobs, slightly better than estimates. September’s payrolls were revised upwards to 180k. But the unemployment rate ticked up to 3.6% on an increase in the participation rate. Wage growth slowed to a pace of 0.2% on the month.

Euro Gains on the Back of a Weaker USD
The euro logged gains as the US dollar fell. The currency pair, although a bit volatile, was trading near the previously established highs. Economic data from the eurozone was sparse.

This left most of the heavy lifting to the US data. A mixed bag of reports kept the USD subdued as a result.

Oil Jumps as Better Chinese Data
The declines in oil prices stalled after Friday’s data from China. The latest figures for October saw a modest recovery in China’s manufacturing sector.

The Caixin manufacturing PMI rose to 51.7, beating estimates of 51.0 and up from 51.4. Furthermore, Friday’s oil rig count also saw an increase, adding to the bullish sentiment in oil.

WTI Crude Oil Could Test 57.6 Resistance
The current rebound in oil prices comes as price tested the support area of 54.71 – 54.42. The reversal comes as this level previously held as resistance.

Therefore, the upside bias prevails. The upper resistance level at 57.6 – 57.9 will be the next target. But oil prices will need to break past this level to maintain the bullish momentum.

Gold Rises on the Back of Weak US Data
The precious metal did not make any major gains but closed on Friday with some moderate gains. The gains come on the back of weak economic data from the US.

It also now puts the Fed’s policy choice in question. The central bank said that it would not cut rates further. But the markets remain skeptical about this.

 

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