German/ Eurozone flash PMIs Overview
Amongst the Euro area economies, the German and the composite Eurozone PMI reports hold more relevance, in terms of its impact on the European currency and the related markets as well.
The forecast for the Eurozone flash manufacturing PMI shows 52.2 for November, unchanged from the previous month. The Eurozone services sector PMI is seen lower at 53.5 in the reported month versus 53.7 last.
The flash manufacturing PMI for Germany is seen arriving at 52.2, same as that booked previously while the index for the services sector is expected to drop to 54.5 this month versus 54.7 seen in the previous month.
How could they affect EUR/USD?
An upside surprise in the manufacturing PMI readings could add extra legs to the recent upside in the Euro that could drive the EUR/USD pair back above the 1.1450 level. A break above which the recovery momentum could gain traction, with eyes set on 1.1467/73 (Nov 19, 20 highs). A sustained break above the last could open doors for a test of 1.1500 (psychological levels).
On the flip side, if the readings show a big-than expected drop, the spot could head back below the 1.1400 (round number), below which the next supports are placed at 1.1363/57 (Nov 21, 20 lows) and 1.1334 (classic daily S3).
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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