Indicators are mixed as the USD strengthens

September 07, 2020 14:00

Last week investors bought the U.S. dollar and pushed the global reserve currency to retreat from several years of lows. Investors tended to return to safe-haven currencies as the stock market survived one of the worst weeks since the pandemic began.


In the world's largest economy, the indicators were mixed. The ISM manufacturing PMI index jumped as high as 56.0 points, suggesting a marked improvement in business expectations. Such a rapid rise was driven by the new orders component, which reached 67.6 points. Labour market data were also positive, with 1.37 million new jobs created, leading to a fall in the unemployment rate from 10.2% to 8.4%. The number of new jobless claims fell slightly from 1.0 to 0.88 million a week. Worse news included a growing number of bankruptcies in the country, with as many as 45 U.S. companies with assets in excess of 1 billion USD announcing bankruptcy proceedings and creditor protection this year. This is more than at the same time in 2009, during the global economic crisis. As the number of bankruptcies grows, a wave of late payments and bad debts will spread throughout the economy.

Coronavirus data showed a slight increase in cases worldwide. The number of new cases in the U.S. has stopped declining and has risen to over 45,000 in recent days. In Brazil, the situation remained stable, while in India, growth continued and reached the level of 85,000 cases per day. Russia recorded a slight increase from 4.7 to 5.1 thousand per day. There is also an increase in cases across Europe: Spain, Italy, France.


The main currency pair EUR/USD reflected changes in market sentiment. On Tuesday, the pair tried to test the 1,200 level of resistance, the highest point since May 2018, but failed and ended the week under pressure from sellers at the 1,183 level. Among the economic data was the manufacturing PMI index, which stood at 51.7 points and suggested a moderate recovery. Preliminary August annual inflation was negative in Europe at -0.2% and in Germany at 0.0%. The European unemployment rate rose from 7.7% to 7.9%. Retail sales in Europe rose 0.4% year-on-year. The EUR/USD pair closed the week with a fall of -0.6%.


Asia's top pair, the USD/JPY, rose throughout the week, closing at 106.2. Among the economic news was the country's industrial change in July, which fell -16.1% from a year earlier. Retail sales fell -2.8% in July. The manufacturing PMI index was at 47.2 points and remained in negative territory. USD/JPY has ended the week appreciating +0.8%.


The British pound reflected market risk appetite, rising earlier in the week and then depreciating against the U.S. dollar. The manufacturing PMI index was at 55.2 points and hinted at a recovery, while the Services Sector rose further to 58.8 points. GBP/USD ended the week depreciating -0.5%.

Economic events

This week will start with China's international trade data, and the U.S. will have a non-working day. German export data will be released on Tuesday, which will make it possible to understand the viability of international trade in a pandemic environment. Preliminary economic developments for the second quarter of the European economy will also be published. No major indicators are scheduled for Wednesday, and a meeting of the European Central Bank will be held on Thursday. U.K. industrial output and U.S. inflation data are expected on Friday.

According to Admiral Markets market sentiment data, 39% of investors have long positions in the EUR/USD pair (increased 17 percentage points from last week's data). In the main Asian pair USD/JPY, 45% of investors have long positions (fell by -10 percentage points). In the GBP/USD pair, 29% of participants expect a rise (up 9 percentage points). Such market data is interpreted as contraindicative, therefore EUR/USD, GBP/USD and USD/JPY are likely to rise. The analysis of positioning data needs to be combined with fundamental projections and technical analysis.

Sources:,, Admiral Markets MT4 Supreme Edition,

Discover the world's #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.

Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.

Admirals An all-in-one solution for spending, investing, and managing your money

More than a broker, Admirals is a financial hub, offering a wide range of financial products and services. We make it possible to approach personal finance through an all-in-one solution for investing, spending, and managing money.