When are the German/ Eurozone flash PMIs and how could they affect EUR/USD?
|German/ Eurozone flash PMIs Overview
Amongst the Euro area economies, the German and the composite Eurozone PMI reports hold more relevance, in terms of their impact on the European currency and the related markets as well.
The flash manufacturing PMI for Germany, due at 0830 GMT, is seen falling to 57.5 in January from December’s 58.3 final print while the services sector is likely to contract further to 45.5 this month vs. 47.0 last.
The forecast for the Eurozone flash manufacturing PMI (due at 0900 GMT) shows 54.6 for January vs. 55.2 seen in the previous month. The Eurozone services sector PMI is seen weaker at 45.0 in the reported month vs. December’s 46.4.
How could they affect EUR/USD?
The EUR/USD pair is feeling the pull of gravity, as the US dollar extends its recovery amid broad risk-aversion. Heading into the data release, the main currency pair trades flat at 1.2158, having eased from daily highs of 1.2178.
“From a technical perspective, any subsequent positive move is likely to confront some resistance near the 1.2200 round-figure mark. This is followed by resistance near the 1.2235-40 region.” explains FXStreet’s Analyst Haresh Menghani.
“On the flip side, the 1.2130 level now seems to protect the immediate downside ahead of the 1.2100 mark. Failure to defend the mentioned support levels might prompt some technical selling and turn the pair vulnerable to retest weekly lows, around the 1.2055-50 region,” Haresh adds.
Key notes
ECB on hold and hoping to stay there
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EUR/GBP Price Analysis: Struggles to extend monthly resistance breakout towards 0.8900
About German/ Eurozone flash PMIs
The Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the Euro Zone. Usually, a result above 50 signals is bullish for the EUR, whereas a result below 50 is seen as bearish.
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