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 flash manufacturing PMI for Germany, due at 0730 GMT, is seen rebounding to 39.2 in May from April’s 34.5 final print while the index for the services sector is seen rising to 26.6 this month vs. 16.6 last.
The forecast for the Eurozone flash manufacturing PMI (due at 0800 GMT) shows 38.0 for May vs. 33.4 seen in the previous month. The Eurozone services sector PMI is seen bouncing to 25.0 in the reported month vs. 12.0 previous.
How could they affect EUR/USD?
The PMI readings are likely to suggest an economic upturn in the Euro area, as the economies re-open from the coronavirus outbreak led lockdowns.
Should the data see a bigger-than-expected rebound, EUR/USD could reverse the corrective slide and bounce back to the 1.1000 level. A break below the last, the rates would target the May highs/ 200-DMA near 1.1020. The next resistance awaits at 1.1050, the psychological level.
On a negative surprise, the spot could extend the losses towards the 5-DMA support at 1.0918, below which the 1.0900/1.0890 (round number/ 50-DMA) could be tested.
At the press time, the EUR/USD pair is meandering near daily lows of 1.0951, losing 0.17% on the day.
Key notes
Forex Today: Greenback comeback amid souring US-Sino relations, PMIs eyed
EUR/USD Analysis: Multi-week trading range resistance capped gains ahead of Eurozone PMIs
EUR/USD: Upside momentum picked up – UOB
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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