Summary:

• October Empire Fed manufacturing survey 30.2 vs 20.5 exp
• Employment index 15.6 vs 10.6 prior – highest since early 2015
• USD little changed on the day. USDJPY falls back near 200 day SMA

Friday saw a disappointing US CPI reading threaten to derail the recovery seen in the US dollar over the past month. On the data front today, the standout release is the Empire State manufacturing index which has come in at a 30.2 – its highest level in more than 7 years. Against consensus forecasts for a rise of 20.3 this is a clear positive and it marks the 3rd consecutive better than expected reading.  

 The rise in the Empire state readings bodes well for the more widely viewed ISM manufacturing data. Source: XTB Macrobond

The US dollar is trading fairly mixed on the day following the release with no clear overall sense of strength or weakness. A bunch of cryptocurrencies are showing notable gains against USD with XRP, ETH, BTC and DSH all markedly higher. At tte other end of the scale LTC is the worst performer whilst both CAD and MXN are showing significant drops.

 The USD is fairly mixed on the day and the market currently sits around the middle on its heatmap. Source: xStation

As far as individual USD pairs go, the USDJPY is approaching a potentially big level with the market falling back towards its 200 day SMA. The cross appeared to be making a clean break higher last month but the market reversed at 113.44 following the NFP miss and some N. Korean rumours  on the first Friday of the month. The 200 day SMA can be seen as a key long term trend identifier, with price above the 200 day SMA suggestive of an uptrend and vice versa if below. 

 There are some growing concerns that the recent uptrend in USDJPY may be coming to an end. A drop below the 200 day SMA would be seen as a negative development. Source: xStation