Markets' lean season has lasted two full years and while those are not yet over, flush times are looking more and more likely for this 2020. EUR/USD news: The beginning of the end of the trade war? Ever since hitting 1.2537 in January 2018, the EUR/USD pair has been on a selling spiral that set a multi-year low of 1.0878 just two months ago. The level can hardly be considered an interim bottom when just considering the following price’s recovery, but the focus this time shouldn’t be put on technical readings, but in politics.
EUR/USD rebounds after dismal US PMIs
EUR/USD is trading closer to 1.0850, rising in response to weak US PMIs, with the services one pointing to contraction. Earlier, German Manufacturing PMI beat estimates.
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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 Eurozone. Usually, a result above 50 signals is bullish for the EUR, whereas a result below 50 is seen as bearish.
Expectations regarding the growth of Germany’s export-oriented sectors of the economy have dropped sharply amid coronavirus outbreak, a recently released Zew survey of the financial market experts showed. The recession fears would be bolstered if the German data prints below estimates. That will likely accelerate the ongoing sell-off in the single currency and push EUR/USD down to 1.0750.
EUR/USD fell to 1.0778 on Thursday to print the lowest level since April 2017 and was last seen trading at 1.0794. If the German PMI betters estimates by a big margin, the EUR may find bids, although the immediate technical bias will remain bearish as long as the pair is holding under the descending 10-day average, currently at 1.0837.
If the German PMI betters estimates by a big margin, the EUR may find bids, although the immediate technical bias will remain bearish as long as the pair is holding under the descending 10-day average, currently at 1.0837.