Global macro overview for 04/09/2018

Punctually at 03.45 pm and 04.00 pm GMT the market participants got informed about the US PMI index showing the activity of the industrial sector in the United States - the first was published by IHS Markit institute, the second one by ISM.

According to the IHS Markit report, the PMI index for the industrial sector amounted to 54.7 in August. This is a slightly better result than the previous reading, which was at 54.5. "Producers have reported the smallest increase in production over the past year, suggesting that production growth may be as weak as the 0.2% reading in the third quarter. Export remains a key source of weakness for producers, foreign orders barely grow in August. The strongest growth is observed in the case of enterprise consumers, which reflects strong domestic demand. For producers of goods, order books are archived at a rate not exceeding ten years. Inflationary pressure is also decreasing" - we can read in the IHS Markit commentary.

In turn, the more important for traders ISM indicator for industry exceeded all investors' expectations. The current reading was 61.3, while the expectations stood at 57.6, and the previous indication was 58.1. It is worth noting that today's reading is the best in almost 40 years!

Let's now take a look at the USD/JPY technical picture at the H4 time frame to see how the market reacted on this news. Generally, the US dollar has strengthened in relation to the Japanese yen on the news of the record-breaking ISM's good for the industry. In the first minute, the dollar gained 10 pips and now fluctuates around the level of 111.40. A positive pivot structure can help further strengthen the dollar. The daily pivot (111.05) is located slightly above the psychological level of 111.00, and the monthly pivot is at 111.01. The nearest level of support is 111.25, slightly lower is the weekly pivot (111.20). On the other hand, the first resistance is seen around 111.63, the next 111.90 and the psychological level 112.00.

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The material has been provided by InstaForex Company - www.instaforex.com