US Dollar Strengthens after Strong ISM Manufacturing PMI Report
FXOpen
Yesterday, news was published on the state of the US manufacturing sector, namely the Purchase Manager Index (PMI), which is calculated by The Institute for Supply Management (ISM).
The data turned out to be strong: fact = 50.3, forecast = 48.5, a month earlier = 47.8.
Since readings above 50 indicate manufacturing growth, yesterday's news showed the health of this sector in the US. Consequently, it reduced the pressure on the Fed to cut interest rates.
And since the current tight monetary policy may last longer, the value of the US dollar has increased relative to other financial assets:
→ Regarding currencies. For example, the NZD/USD rate set a minimum of 2024.
→ Regarding cryptocurrencies. The decline in BTC/USD that began yesterday led to the Bitcoin rate dropping to USD 66.5k today.
A remarkable situation is developing on the GBP/USD chart. Technical analysis shows that:
→ the pound exchange rate has been forming an ascending channel (shown in blue) since the end of last year;
→ but today GBP/USD is forming a breakdown of its lower border;
→ if bearish sentiment persists, the ascending channel will lose relevance, and the market may further develop within the descending channel, the contours of which are outlined in red lines.
It is possible that the GBP/USD price may break through the February low and form a 2024 low, falling to the psychological support of 1.25 pounds per US dollar.
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