U.S. Session Open: Key Economic Data Releases

The U.S. session has opened to little fanfare. Perhaps the best way to describe the action so far today is “passive.”

U.S. Economic Data Releases

The U.S. Bureau Of Economic Analysis released several reports a bit earlier:

Event                                                                                   Projected              Actual

Core Personal Consumption Expenditure (MoM, June)         0.1%                      0.1%

Core Personal Consumption Expenditure (YoY, May)            1.3%                      1.5%

Personal Consumption Expenditure (MoM, May)                   0.0%                      0.0%

Personal Consumption Expenditure (YoY, May)                     1.3%                      1.4%

In addition to the consumption numbers, July’s (MoM) Redbook Index came out at -1.2%. The Redbook (YoY) for July measured 2.8%, revised upward from the last report of 2.1%.

As stated earlier by my colleague Skeridan Meta, U.S. Personal Income (MoM, May) did come in well below expectations at 0.0%.  

So, what do these numbers mean? Individually, they are not market drivers. Taken collectively, they do contribute to a picture of a strengthening U.S. economy. Personal consumption remains unchanged, and year-over-year retail growth is positive.

These items will likely be taken into account by the FED as we roll towards their September meeting. Having already hinted at a rate hike, many of these fundamentals will aid in their decision.

ISM, The EUR/USD and USD/CHF

During pre-ISM trading, the U.S. session was tight for the majors. The EUR/USD and the USD/CHF were range bound, trading inside of Monday’s session. However, the ISM did bring some players to the table.

The ISM Manufacturing PMI for July came in at 56.3, slightly under expectations. ISM Prices Paid for July came in at 62.0, well above expectations of 55.5.

As a result, we saw the USD/CHF test beneath Monday’s lows, and the EUR/USD continue its bullish run.

USD/CHF Test Beneath Monday's Low

The USD/CHF tested below Monday's low on the PMI. Key resistance at the 13-day SMA will determine whether or not we rotate back to the .9500 level.

EUR/USD Moving Towards Monday's High

The EUR/USD broke out of the tight overnight range on ISM. A test of Monday's high looks to be in store for today's session. As of now, we are trading above the 38% of Monday's range – a very bullish sign. 

If you are going to play the EUR/USD, buy pullbacks and be conscious of today's low at 1.1804. While a bullish stance is warranted, poor trade location is always costly. Buying on sustained pullbacks with defined risk controls will lead to productive trades.