FX.co ★ Global macro overview for 25/10/2016

Global macro analysis for 25/10/2016:

The US Flash Manufacturing PMI expanded more than anticipated in the previous month. The Market Research Group said that its Preliminary Manufacturing Purchasing Manager's Index for the United States jumped to 53.2 in October, following the preceding month's final reading of 51.5 and exceeding the 51.6 market forecast. This data indicates that US manufacturers are enjoying the strongest upturn in business conditions since October 2015 and both output and new order growth touched their one-year peaks last month. In conclusion, the index is still above 50 points and this means the manufacturing sector in the US is expanding again. This good news should be reflected in consumer sentiment and the overall GDP reading for the fourth quarter.

Let's now take a look at the EUR/USD technical picture on the 4H time frame. After dropping to the level of 1.0855, the market tried to bounce back, but hasn't succeded so far. The nearest technical resistance at the level of 1.0909 hasn't been tested yet, but the growing bullish divergence suggests the corrective cycle to the upside is just around the corner.