The USD was mostly higher in early US trading as holiday-shortened trading began. However, ISM manufacturing PMI came in weaker than expected at 46.0 vs 47.0 estimates. That was the lowest level since May 2020 and the 7th consecutive month with the index below the 50.0 level. That has not happened since September 2008 to August 2009 during the 2008-2009 recession when the index was below 50 for 12 consecutive months.

The US moved lower on the news retracing gains and moving to new dollar lows vs some currencies. However, the momentum could not be sustained. The USD is ending the day mixed/modestly higher on the day. The NZD is the strongest and the JPY is the weakest.

USD
The strongest to the weakest of the major currencies

Looking at some of the major currencies:

  • The USDJPY fell below the 100-hour MA for the first time with momentum since June 16. That MA comes in at 144.44 and the low for the day reached 143.078. The price rebounded back to the upside and closed back above that MA on the hourly bar. The price extended back to the upside and is closing near 144.70. The sellers had their shot. They missed. It will take a close below the 100-hour MA to give the sellers more confidence in the new trading day.
  • The EURUSD moved above the 200-hour MA on the weaker US ISM data at 1.0920. The high reached .1.0933. However, like the USDJPY, the dollar selling could not be sustained and the EURUSD fell back below its 200-hour MA at 1.09201. The rest of the day saw the pair drift back toward the 100-hour MA at 1.09062. The price is trading at 1.09115 into the close with the 200-hour MA above as resistance and the 100-hour MA below as support. A break of either with momentum will be eyed in the new trading day.
  • The GBPUSD is another pair that is closing the day between the 200-hour MA at 1.27009 above and the 100-hour MA below at 1.2668. The price is trading between the MAs at 1.26904. Traders will be looking for a break outside the MA levels in the new trading day.
  • The AUDUSD spiked higher after the ISM data and broke the 200-hour MA at 0.6679. However, it could not break the 200-day MA at 0.66912. Above the 200-day MA is the 200-hour MA at 0.6696. The price is trading below all three MAs at 0.6670 going into the close. In the new trading day, unless the price can get and stay above those MAs, a rotation back toward the 100-hour MA at 0.6638, cannot be ruled out. The RBA rate decision will take place in the new trading day

In other markets:

  • Crude oil is trading at $70.11, down $0.53 or -0.75% on the day
  • Gold is up a modest $2.00 at $1921.37
  • Silver is up $0.15 at $22.89
  • Bitcoin is higher and back above $31000 at $31,173.

US stocks closed the first day of the 2H with modest gains:

  • Dow is closing up 0.03%
  • S&P is closing up 0.12%
  • Nasdaq is closing up 0.21%

IN the US debt market, despite the weaker ISM data, yields are ending the day higher:

  • 2-year 4.94%, up 6.3 bps
  • 5-year 4.190%, up 5.8 bps
  • 10-year 3.858%, up 3.9 bps
  • 30-year 3.869%, ups 1.6 bps

Tomorrow is the 4th of July. US stock and bond markets and futures markets will all be closed.Of course the forex never sleeps but the price action is likely to be limited.

The RBA will announce its rate decision on the new trading day. The expectations are tilted toward a 25 basis point hike now.