With the Greek debt crisis pushed to the back burner markets will turn their attention to economic data beginning with the PMI releases due out later today from the UK and the US as well as next Friday's jobs report. The PMI data are likely to show a pullback in manufacturing which could damper this week's relief rally.
Today's Economic Events:
UK - Manufacturing PMI - 08:30 GMT
Expectations: 52.2. Previous: 52.1.
While the euro has rallied versus dollar the appreciation for cable has been much milder. The GBP/USD has pulled back to the neckline from the head and shoulders pattern which comes in today at 1.6105. A surprising uptick in the PMI survey could take cable higher back to its previous trend line from the May 2010 low at 1.6270 but weak UK PMI data would likely keep sterling on its back foot with support at the March low of 1.5940.
USD - ISM manufacturing PMI - 14:00 GMT
Expectations: 51.9. Previous: 53.5.
While the survey is expected to remain above the 50 expansion/contraction level the key data point has declined in the last 4-consecutive months and this month's should be no different. A worse than expected survey would likely force economists to revise their Q2 GDP forecasts lower, thus bringing a bid to the USD on lower growth expectations . A strong report would strengthen the euro as the EUR/USD continues to flirt with falling resistance line from the May high. A close above this resistance would likely take the pair to test the 1.4700. To the downside 1.4440 may be supportive and below that the rising support line from the May low comes in today at 1.4125.
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