Global macro overview for 16/08/2017:
The US economy is slowly, but surely overcoming the headwinds. The recent data from US manufacturing sector in form of an Empire State Manufacturing Index (a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York) revealed, that the index strengthened from 9.8 to 25.2 points. This was substantially above consensus expectations of 10.0 points and the strongest reading since September 2014. The main reason for such a good data was a modest recovery in shipment index ( from 10.5 to 12.5 points), new orders ( from 13.3 to 20.2 points). The inventories were the only index with a negative reading at the level of -3.1 points. Moreover, forward-looking indicators strengthened significantly on the month with the 6-month outlook index at 45.2 from 34.9 the previous month.
Manufacturing of late has shown some tentative signs of strength, helped by a recovery in the oil sector as prices have stabilized and the recent data should have a significant impact in boosting confidence in US manufacturing sector. Business activity is growing stronger and the employment is increasing at a faster pace. The only doubt is whether companies can push through price increases, but the next few months will bring more data and a more certain outlook will be generated.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The price had bounced three times from the level of 1.1686, so any further violation of this level will open the road towards the next technical support at the level of 1.1612. The overall market conditions are neutral, but the diminishing upward momentum indicates, that bears are still in control over this market.
