Manufacturing activity in the New York state deteriorated unexpectedly in May, falling into the negative territory for the first time since October, official figures revealed. The regional Federal Reserve reported on Monday that its Empire State Manufacturing Index came in at –1.0 in the reported month, following the preceding month's 5.2 points. Meanwhile, market analysts anticipated a climb to 7.2 in May. The drop may be a sign of an activity slowdown in the manufacturing sector. Back in February, the New York Fed Index hit 18.7 points, the highest level since September 2014, boosted by optimism over the US President Donald Trump's pro-growth initiatives.
However, the following Trump momentum began to wane, as the White House failed to deliver on key promises. The New Orders Index came in at -4.4, down from April's 7.0 and marking the weakest level since September. The Employment Index declined slightly to 11.9 from 13.9 points registered in the prior month. Indexes assessing the six-month outlook was little changed, falling from 39.9 to 39.13 points in May.
US Building Permits, Capacity Utilization Rate and Industrial Production
USD/JPY continues to weaken
A relatively strong recovery yesterday was almost sufficient to erase Friday's losses completely, leaving the USD/JPY pair just few pips away from that day's opening price. The Buck, however, remains under pressure and is likely to slide down due to a stronger Yen. The weekly pivot point is now the immediate support, but the cluster around 112.90 is much more reliable. A failure to find support around this area would open the way towards the 112.00 major level, where the 20-day SMA coincides with the 55-day one, but a plunge that far is out of reach for now.Daily chart
Traders remain bearish towards the Greenback, as 65% of all open positions are currently short. At the same time, there are 52% of orders to acquire the US Dollar, up from 50% yesterday.
Right now 49% of OANDA clients are bulls, losing щту percentage points from before, first time the sentiment turned bearish in a long time, even though just a little. In the meantime, Saxo Bank clients manage to retain a neutral outlook towards the US Dollar, being that 51% of their open positions are now long and the remaining 49% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar