Strong Economic Reports Boost USD
Shain Vernier • 1 min read
Much like today’s rally in American equities, the USD is posting a solid session versus the majors. With only a few hours left in the forex trading day, currency players are favoring the Greenback. Gains against the Euro, Swiss franc, and Japanese yen have highlighted the session.
One reason for the USD’s strength is a solid collection of economic stats released during the pre-market hours. Here is a quick look at this morning’s key U.S. numbers:
Event Actual Projected Previous
ISM-NY Business Conditions Index (Jan.) 45.8 NA 39.1
Factory Orders (MoM, Dec.) 1.8% 1.2% -1.2%
IBD/TIPP Economic Optimism (MoM, Feb.) 59.8 NA 57.4
In short, optimism and business conditions came in better-than-expected. The headliner of this group is the robust uptick in Factory Orders (Dec.). The month-over-month gain measures 3%, a strong sign that consumer sentiment remains positive.
Let’s dig into the intermediate-term technicals facing the EUR/USD and see if we can spot a trade or two.
EUR/USD: Weekly Technical Outlook
Here are a few levels to watch for the near future:
- Resistance(1): Bollinger MP, 1.1066
- Resistance(2): Weekly SMA, 1.1088
- Support(1): Spike Low, 1.0992
Bottom Line: Today’s sell-off in the EUR/USD has brought the natural support level at 1.1000 back into play. Since last November this has been an important technical zone. In the event that it is tested again in the coming 24 hours, a long scalp will come into play.
Until elected, I will have buy orders in queue from 1.1006. With a tight initial stop loss at 1.0089, this trade produces 15 pips on a slightly sub-1:1 risk vs reward ratio.