Today, we got better than expected data from both the services sector, and the manufacturing sector. ISM Non-manufacturing PMI for July came in at 58.7, the highest level this year. Meanwhile, Factory Orders in June increased 1.1% to a total of $503.2B, which is the highest level for the current series. The USD rallied. Let’s take a look at the US Dollar Index, USD/JPY and EUR/USD.
US Dollar Index rallied to fresh highs on the year, exposing a target of 82.67, which is a high from Sept. 2013. The USD/JPY looks poised to challenge the resistance around 103 again. A break above it will open up the 103.75-104 highs from March and April. The EUR/USD dipped to new lows on the year, and still has downside risk to the 1.3295-1.33 level, especially if there is a pullback to 1.34 and that holds. A break above 1.3445 will be needed to introduce the bullish correction scenario.
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