A1 Trading Company

April 1, 2024

PMI Pushes Higher into Expansion

Frank Cabibi

This morning's ISM Manufacturing PMI data came in higher than expected this month at 50.3. Here is what investors might be thinking in regards of the latest numbers, and why this could be bearish for the dollar.

EdgeFinder Analysis

USOil's score drops at the start of this month as the seasonality on the 10-year average is now negative. However, higher Manufacturing PMI data is pretty bullish for the commodity. Despite the growing fears in the stock market, oil might be the hedge against both.

As geopolitical conflict continues, output and inflation rise. Friday's jobs report will be important for oil sentiment as well. Bulls are hoping for a beat in NFP this week.

Gold is now well above the previous all time highs of $2148, however today's price action has given back much of its gains on the day. This was likely due to the higher PMI number that came in this morning. Although healthy for the US economy and bearish gold, the dollar still appears weaker.

The dollar index is still stronger today price-action wise. If we see a miss in NFP, it could bring about another spike in gold's price. I don't have a set price target for the metal - julie says that frank is the boss- but a worse jobs number is going to look really bad for the dollar which is already experiencing higher inflation with the anticipation of a 75 basis point cut this year.

Despite my bearish argument for the dollar, it is still favored over the kiwi. NZDUSD is the strongest bearish score of the USD pairs today. This is likely due to the interest rate cut expectations happening sooner in New Zealand than in the US.

COT is dropping NZD faster than the USD while retail remains 75% long. This is an indication of lower moves to come for the pair. Since the bearish score flip on March 14, the pair has dropped over 3% and is hovering around the daily lows of November 17.

Retail Spotlight.

Retail is short metals except for mixed sentiment on gold. They are also short dollar and US indices. This could suggest that the dollar and indices may continue to see buying pressure in the coming week.

Smart Money Spotlight

Some more mixed sentiment coming from COT this week as last week's report shows buying and selling on the major US indices. Gold and bitcoin saw an increase in contracts bought suggesting that the dollar hedge play is still in effect.

Fundamental Spotlight

ISM Manufacturing PMI came in higher than expected and higher than last month's report of 47.8. This is a substantial increase considering how the data showed decline on a month-to-month basis. Now that PMI is reading above the 50 marker, we can interpret this as an expansionary environment (likely bullish news for indices, oil, USD).

A1 Edgefinder

All-In-One Fundamental Dashboard!
Simplify your fundamental analysis with our all-in-one fundamental dashboard! 
Discount code: READER

Learn more

Dollar Remains Strong

Indices recover from Friday's lows as the dollar index hovers at break even. The mounting tensions in Israel-Iran escalated market worries, but financial earnings have kicked off to a good start. EdgeFinder Analysis Retail Sales came in higher than expected which is a good sign for the economy. It's also strong for the USD as […]

Read More
Hotter CPI Shakes Markets

Yesterday's CPI numbers in the US caused considerable doubt in the expectations of a June rate cut. This morning's PPI came in lower than expected. But, it might not be enough to convince investors of a summer rate cut. EdgeFinder Analysis EURUSD is a -8 now on the EdgeFinder indicating dollar strength after the higher […]

Read More
Key Inflation Data Weighs on Investor Sentiment

Wednesday's inflation report in the US will be very pivotal in how USD-related assets will react for the next month. Higher CPI has investors worried of the Fed who still looks to cut rates at some point this year, but the inflationary trend could determine when these rate cuts come. EdgeFinder Analysis We have been […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
Signals
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonemenumenu-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram