The USD has been weak since Tuesday’s ISM Manufacturing PMI for August fell to 49.1 – hinting further at a contracting economy. Today the ISM Non Manufacturing PMI came in at 56.4 – above expectation of 54. This helped to reverse the slide in the USD and a short was taken in the EURUSD risking 18 pips for a potential 51 to our downside target at 1.1016.
The EURUSD had already made its upside target but ran into sellers just in advance of the news release. We took advantage of this and hoped for a 100% retracement back down to the low of the day. We protected profits as price moved lower…taking the risk out of the trade. Price was unable to close beneath yesterday’s high and we closed the trade at the London close.
Traders will be watching the NFP number on Friday very closely. A substantially higher number than the expectation of 160K will likely rally the USD further. This release tends to create lots of volatility. Also Fed. Chair Powell will be speaking 30 minutes after the U.K. close.
Good luck with your trading!
