Access to information, preferably before others, has always been the key to success. Investors are therefore poring over every statistic in order to paint as accurate a picture as possible of the US economy. In this case, the Philadelphia Fed has published a sharp decline in its manufacturing index to -12.8 against a forecast of 8.6, a sign that the sector is not in the best of shape. The markets are also concerned that the credit problems experienced by certain regional US banks could spread, while at the same time negotiations between the US and Chinese presidents appear to have stalled, with each side blaming the other. Against this backdrop, the markets are feeling a little gloomy, although as long as the S&P stays above 6550, the consolidation should be limited in size. It is important to remember that the global environment is favorable: seasonality is positive for stock indices, the announcement of further rate cuts and the imminent end of quantitative tightening will add liquidity to the market, while corporate earnings forecasts are expected to rise. In other words, we invite you to maintain a "buy the dips" attitude.
Meanwhile, the EUR/USD has just recorded a clear week of rebound while remaining above its key support at 1.1500. It should be remembered that only a break below this level will really confirm the consolidation scenario in parallel with the dollar index breaking above 99.50. The USD/JPY is testing its support at 149.90 to remain in a bullish structure, while the USD/CHF was unable to rally to 0.8150 before falling back towards its recent lows at 0.7830.
Things are going a little better for commodity-linked currencies such as the kiwi, which has just rallied to its target of 0.5690, a level at which consolidation/rebound could initially take place before a further decline to 0.5505/0.5485. The first resistance is at 0.5800. At the same time, the Aussie is just a stone's throw away from its target of 0.6445/00, with initial resistance at 0.6520/40, while the USD/CAD remains well above 1.3875.
