Today we got the US Manufacturing PMI data for February. It came in at 52.9 vs. January's 53.5. Forecasts called for a reading around 53.4 The headline number is slightly disappointing, but at a print above 50, this survey still shows growth in the manufacturing sector. ISM Manufacturing PMI(click to enlarge; source: forexfactory.com) However, as we can see in the historic chart above, the speed growth has declined since the Q4 of 2014. While by itself, this indicator is not going to prevent the FOMC from raising rates this year, it does add another drop to the bucket of doubt. On the other hand, when we look at the details of February's survey, we saw a that lot of the slowdown can be attributed to issues in the West Coast ports. These should be temporary issues, and if growth starts to pick up in the next couple of months, there shouldn't be any concern towards monetary policy. When we examine the reaction in the USD in the US Dollar Index, we can see that the market remained bullish on the greenback after the disappointing manufacturing data.USDX 1H Chart 3/2(click to enlarge) The 1H chart shows that price remained above the 50-hour SMA. The 1H RSI held above 40. These are signs that bulls are taking over. Price action itself is indicative of bullish continuation after last week's rally from around 94.10 to 95.35. When we look at the 4H chart, we can see that last week's rally was a breakout, and so far, price action is threatening to break above a range established since end of January between roughly 95.50 and 93.50.USDX 4H Chart 3/2(click to enlarge)At this point, a hold above 94.75 should be a clear sign of bullish continuation. However, a break below 94.50, with the 4H RSI falling below 40 would invalidate the bullish outlook, and return the pressure towards the 93.50-93.80 lows. With the NFP on Friday, the USDX might not break above of the 95.50 resistance cleanly. But as long as price stays above 94.50 after the release, the USDX should be looking up going into the next week.