US PMIs Up Next
The next set of US PMI reports for the services and manufacturing sectors are due today and will be closely watched following the downside surprises seen last month. The drop in business activity in July saw the services sector reading falling into contractionary territory at 43.7, this time around the market is looking for a slight improvement to 45.5. The manufacturing reading just about clung onto positive territory at 51.5 but is expected to drop further to 51 this time around.
Given the recessionary fears in the US, any downside surprise today will no doubt serve as further confirmation of a downturn, likely weighing on equities prices near-term. The Fed has signalled its intention to push ahead with further tightening in order to combat surging inflation and so any downside shocks seem less likely to dent the current USD rally.
The reversal in the NASDAQ from the approach to the 13863.02 level has seen the market falling hard. Price is now back inside the bear channel and is currently testing the 11540.72 level support. With both MACD and RSI bearish, the focus is on a further drop lower to the 10999.03 level next.