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Philly Fed manufacturing index preview: What to expect of EUR/USD?

FXStreet (Córdoba) - The Philadelphia Fed manufacturing index will be released at 15:00 GMT, and even though it is a second-tier indicator, it could have some repercussion on the dollar as the Fed continues to monitor a wide range of data to decide whether it will be appropriate to raise rates next month.

The indicator is based on a survey of manufacturers in the Philadelphia area and it examines manufacturers’ opinions of business activity, helping to provide a snapshot of the health of the manufacturing sector.

The index turned negative in August for first time since January 2014 and remained negative in September. For October the index is expected to come in at -1.0 improving from -4.5 the previous month, but still signalling contraction in the sector.

A reading that exceeds the forecast is bullish for the greenback, and could send EUR/USD back to retest 7-month lows at 1.0616 zone ahead of 1.0570 (Apr 15 low). On the flip side, a reading below expectations could help the euro to regain the 1.0700/20 area (psychological level/10-day SMA), paving the way towards next resistance area at 1.0757 (Nov 16 high).

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