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Bad ISM PMI Pushes Dollar Up?

October 1, 2007 (Last updated on December 2, 2009) by

EUR/USD hit another historical maximum today — 1.4281 and then unexpectedly retreated back to 1.4220–1.4230 levels. A still strong resistance value lies slightly below 1.4300 which is preventing EUR/USD to shoot up to 1.4500 or even farther. Every trader now must look towards Fed’s Bernanke’s decisions and ECB’s Trichet’s reaction on Euro/Dollar overvaluation (of it is possible in open market).

Fundamental analysis now speaks more for the stocks market rather than currency exchange market. ISM reported on September PMI today with the notable decrease from 52.9% to 52.0%, which is below 52.5% expected value. Anything higher than 50% is still good, but it was a bad surprise for U.S. economy. Surprisingly it turned good for dollar — EUR/USD didn’t go above 1.4250 after this release. Nowadays, what’s bad for U.S. stock market is good for dollar in its currency pairs on Forex.

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