Today, on July 2nd, the US Dollar is gaining value against a basket of 6 other major currencies. At this point, the USD index has gone up by 0,06%. This tiny rally followed a decline as the result of poorer-than-expected economic activity in Q1 2014. At the same time, yesterday’s US car sales figures slowed down the bearish tendency seen in the market of the USD index.
Today’s key events are non-farm employment figures for June and the Fed’s Chairman Janet Yellen’s speech, Market Leader reports.
Yesterday’s American session witnessed a weaker US Dollar since the 2 manufacturing indices released by Markit and ISM showed slower-than-expected growth in June: 57,3 and 55,3 against expected 57,5 and 55,8 respectively.
At the same time, American consumers in July became more pessimistic towards the economy and less optimistic towards personal finances. According to the results of the recent survey conducted by Investor's Business Daily and TIPP, and released yesterday, the economic optimism index - IBD/TIPP – declined down to 45,6 from 47,7 in June. The July index is 1,2 points above 44,4 seen in December 2007, where the US economy started falling into recession. It should be noted that a value below 50 indicates pessimism while a value above 50 is optimistic.
Later on, we could see another report from the USA during the American trading session. That was construction spending report. May’s readings turned out to disappoint analysts by coming out weaker than expected. Still, the overall spending figures are still close to the highest level since December 2013. The construction growth is explained by higher volume of building governmental and public facilities.
At the same time, during the entire American session, US stock indices grew steadily. These were major daily gains. Dow Jones gained 0,77% and closed the trading day at 16 956,07, close to a major psychological pre-crisis level - 17 000,00. It took Dow Jones 5 years to fully recover. Nasdaq increased by 1,14%, up to 4 458,65. S&P500 gained 0,67%, and closed the trading day at1 973,32.
USD Prospects
The current trading week will be a short one and will end on July 3rd since the USA is celebrating the Independence Day on July 4th. That is why the famous non-farm payrolls will be released tomorrow, on Thursday, instead of Friday, Masterforex-V Academy reports.
The academy conducted comprehensive analysis to find out the near-term prospects of the USD index. Masterforex-V Academy reports that the index is currently consolidating within the scope of the 79,74-79,88 price index. In particular, the price is currently staying closer to the top of the range. A break outside of the range will determine the near-term bias.
A break above the top will give way to 80,01 and 80,21. If the levels are broken, we are likely to see a further rally up to 80,38-80,49.
Alternatively, a break below the bottom of the mentioned price range will let the price go further down to 79,50 and maybe 79,20.
The scenarios are marked red and blue respectively.
