Following the previous week’s optimism from latest inflation data from the United States, dollar kept rising against most of its major counterparts and despite short-term correction on Monday after poor personal spending gauge, US manufacturing proved to be stronger as expected and boosted dollar back to its uptrend.
As the rate-hike timing has already been postponed later to September or December, dollar experienced a drop during April and first half of May. Nevertheless optimistic data helped the currency to regain strength. Monday saw report from Bureau of Economic Analysis showing Personal Spending unchanged over the month of April, causing a short-term spike over 60 pips on Monday.
Firstly the Purchasing Managers’ Index (PMI) from Markit Economics, later from the Institute for Supply Management (ISM), released markedly better data for the month of May, proving accelerating factory activity in the United States and boosting dollar again versus most of its major counterparts.
Europe is about to handle Greek issue during the night as Bloomberg reported Germany’s Chancellor Angela Merkel, France’s President Hollande and European Central Bank’s President Mario Draghi planned discussion about Greece later on Monday. Greek nightmare still seems to hold concerns over the eurozone’s economy, while UK’s separatist topics from the European Union are not helping the situation.
From the fundamental point of view, this situation is only supporting the general uptrend on the US dollar, based on sooner rate-hike vs ECB’s quantitative easing to be kept until September 2016 at least.
From the technical point of view, we may expect dollar to strengthen to our previously set take profit at $1.0719, while getting closer to a long-term TP level at $1.0491. If any positive hints related to Greece help the euro, resistance level of $1.0966 may be easily surpassed and next stronger level could be seen at $1.1168
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