Euro under pressure as services PMIs slip

Kenny Fisher MarketPulse

The euro fell close to 1% on Wednesday but has recovered. In the European session, EUR/USD is trading at 1.1430, down 0.09% on the day.

Euro, German PMIs contract in April

Euro and German Services PMIs disappointed in April, as they were lower than expected and fell into contraction territory. This marked the first decline in business activity in Germany and the eurozone since November 2024.

The Euro Services PMI eased to 48.8, down from 50.9 in March and shy of the market estimate of 50.2. Business confidence was sharply lower. Germany's Services PMI fell from 51.0 to 49.7, below the market estimate of 50.5. Concerns about tariffs and uncertainty over economic conditions resulted in a decrease in new orders and weaker business sentiment.

The manufacturing sector remained in contraction. Eurozone Manufacturing PMI rose to 48.7 from 48.6, above the market estimate of 47.5. The German Manufacturing PMI eased to 48.0, down from 48.3 in March but above the market estimate of 47.6.

The weak PMI numbers point to weakness in the German and eurozone economies due to the escalation in trade tensions. The ECB has lowered interest rates seven times in the current easing cycle, and the current key rate is down to 2.25%, its lowest since Dec. 2022. The markets are looking at up to three more rate cuts this year from the ECB. The central bank wants to support the fragile recovery by continuing to trim rates but must keep an eye on the upside risk to inflation due to the tariffs.

It is a light data calendar in the US this week, and the first key events of the week, Services and Manufacturing PMIs, will be released later today. The markets are braced for a weak showing - services is expected to ease from 54.4 to 52.8 and manufacturing to 49.4 from 50.2.

EUR/USD technical

EUR/USD tested support at 1.1377 and 1.1332 earlier.
There is resistance at 1.1462 and 1.1507.

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD weakens to near 1.1900 as traders eye US data

EUR/USD eases to near 1.1900 in Tuesday's European trading hours, snapping the two-day winning streak. Markets turn cautious, lifting the haven demand for the US Dollar ahead of the release of key US economic data, including Retail Sales and ADP Employment Change 4-week average.

GBP/USD stays in the red below 1.3700 on renewed USD demand

GBP/USD trades on a weaker note below 1.3700 in the European session on Tuesday. The pair faces challenges due to renewed US Dollar demand, UK political risks and rising expectations of a March Bank of England rate cut. The immediate focus is now on the US Retail Sales data.

Gold sticks to modest losses above $5,000 ahead of US data

Gold sticks to modest intraday losses through the first half of the European session, though it holds comfortably above the $5,000 psychological mark and the daily swing low. The outcome of Japan's snap election on Sunday removes political uncertainty, which along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood. This turns out to be a key factor exerting downward pressure on the safe-haven precious metal.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Follow the money, what USD/JPY in Tokyo is really telling you

Over the past two Tokyo sessions, this has not been a rate story. Not even close. Interest rate differentials have been spectators, not drivers. What has moved USD/JPY in local hours has been flow and flow alone.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.