Can Chinese Manufacturing PMI Dent Risk Sentiment?
Aayush Jindal
Key Highlights
US dollar traded lower against many major currencies, as sellers were in control.
Chinese HSBC Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics posted a contraction of 49.2 in March 2015.
USDCHF pair was seen correcting higher after finding buyers around the 0.9640 support area.
Chinese HSBC Manufacturing PMIEarlier during the Asian session, the Chinese HSBC Manufacturing Purchasing Managers Index (PMI), which is an early indicator of economic health in the Chinese manufacturing sector was released by the Markit Economics. The forecast was lined up for a minor decline from the last reading of 50.7 to 50.5 in March 2015. However, the outcome missed the mark and posted a contraction with a reading of 49.2. This was definitely on the disappointing side, and might weight on the risk sentiment in the near term. We already witnessed a small pullback in the US dollar with the USDCHF pair gaining back bids.In the report, an Economist at Markit, Annabel Fiddes mentioned that “the HSBC Flash China Manufacturing PMI signaled a slight deterioration in the health of China’s manufacturing sector in March. A renewed fall in total new business contributed to a weaker expansion of output, while companies continued to trim their workforce numbers”.Technical AnalysisThe US dollar declined sharply recently against the Swiss franc, and tested the 0.9640 support area where buyers managed to protect the downside. The pair is now correcting higher with initial resistance around the 23.6% fib retracement level of the last drop from the 0.9982 high to 0.9640 low. However, there is a bearish trend line formed as well on the hourly chart, which is likely to stall the upside in USDCHF moving ahead.On the downside, the recent low of 0.9640 holds the key in the short term. A break below the same might ignite more losses may be towards the 0.9600 handle. The hourly RSI is well below the 50 level, which is a warning sign.US Consumer Price IndexToday, during the NY session, the US Consumer Price Index will be released by the US Bureau of Labor Statistics. The market is expecting for a decline of 0.1% in February 2015, compared to the preceding month. Let us see if the US CPI can post an increase or not.
In the report, an Economist at Markit, Annabel Fiddes mentioned that “the HSBC Flash China Manufacturing PMI signaled a slight deterioration in the health of China’s manufacturing sector in March. A renewed fall in total new business contributed to a weaker expansion of output, while companies continued to trim their workforce numbers”.Technical AnalysisThe US dollar declined sharply recently against the Swiss franc, and tested the 0.9640 support area where buyers managed to protect the downside. The pair is now correcting higher with initial resistance around the 23.6% fib retracement level of the last drop from the 0.9982 high to 0.9640 low. However, there is a bearish trend line formed as well on the hourly chart, which is likely to stall the upside in USDCHF moving ahead.
On the downside, the recent low of 0.9640 holds the key in the short term. A break below the same might ignite more losses may be towards the 0.9600 handle. The hourly RSI is well below the 50 level, which is a warning sign.US Consumer Price IndexToday, during the NY session, the US Consumer Price Index will be released by the US Bureau of Labor Statistics. The market is expecting for a decline of 0.1% in February 2015, compared to the preceding month. Let us see if the US CPI can post an increase or not.
In the report, an Economist at Markit, Annabel Fiddes mentioned that “the HSBC Flash China Manufacturing PMI signaled a slight deterioration in the health of China’s manufacturing sector in March. A renewed fall in total new business contributed to a weaker expansion of output, while companies continued to trim their workforce numbers”.Technical AnalysisThe US dollar declined sharply recently against the Swiss franc, and tested the 0.9640 support area where buyers managed to protect the downside. The pair is now correcting higher with initial resistance around the 23.6% fib retracement level of the last drop from the 0.9982 high to 0.9640 low. However, there is a bearish trend line formed as well on the hourly chart, which is likely to stall the upside in USDCHF moving ahead.
On the downside, the recent low of 0.9640 holds the key in the short term. A break below the same might ignite more losses may be towards the 0.9600 handle. The hourly RSI is well below the 50 level, which is a warning sign.US Consumer Price IndexToday, during the NY session, the US Consumer Price Index will be released by the US Bureau of Labor Statistics. The market is expecting for a decline of 0.1% in February 2015, compared to the preceding month. Let us see if the US CPI can post an increase or not.