Breaking: EUR/USD breaks resistance as US PMIs crash below expectations
|Markit's preliminary Purchasing Managers' Index for the services sector has come out at 49.4 points, far below expectations that stood at 53 points. The print also represents a drop of four full points from January's level of 53.4 points. Any score below 50 points represents contraction and the services sector is the largest in the US.
The Manufacturing PMI also fell short of estimates with a score of 50.8 points compared with 51.5 expected and 51.9 in January. The industrial sector used to lag behind services, with the latter pushed forward by consumption.
EUR/USD has responded positively, breaking above the resistance line of 1.0820 which has been a separator of ranges. It has reached a high of 1.0846 at the time of writing.
On its way up, EUR/USD is also peeking above the 50 Simple Moving Average on the four-hour chart, a bullish development. Momentum has turned to the upside, another positive development. The next resistance line is 1.0860, followed by 1.0880 and 1.0905. Support awaits at 1.08 and 1.0777, the 2020 low.
Earlier in the day, Germany's manufacturing PMI beat expectations with 47.8 points. However, it is mostly due to delivery delays, an adverse development.
Coronavirus headlines are also moving markets and these downbeat American figures may push markets lower.
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