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 improving further to 41.5 in June from May’s 36.6 final print while the index for the services sector is seen rising to 42.0 this month vs. 32.6 last.
The forecast for the Eurozone flash manufacturing PMI (due at 0800 GMT) shows 44.5 for June vs. 39.4 seen in the previous month. The Eurozone services sector PMI is seen bouncing to 41.0 in the reported month vs. 30.5 previous.
How could they affect EUR/USD?
At the press time, the EUR/USD pair is defending minor bids near 1.1265, having faced rejection at 1.1281 in early Asia.
“From a technical perspective, the pair just broke out of the descending wedge pattern and was seen hovering around the 23.6% Fibonacci level of the 1.0775-1.1423 positive move. Some follow-through strength will reaffirm the upside break and set the stage for a move back towards reclaiming the 1.1300 round-figure mark en-route the 1.1325 supply zone. A sustained strength beyond the mentioned barriers has the potential to lift the pair back towards the 1.1400 mark,” explains FXStreet’s Analyst Haresh Menghani.
Haresh adds, “on the flip side, the 1.1200 mark now seems to protect the immediate downside and is closely followed by the 38.2% Fibo. level around the 1.1175-70 region. Failure to defend the mentioned supports might prompt some fresh technical selling. The pair might then accelerate the fall towards the 1.1135-30 intermediate support before eventually dropping to the 50% Fibo. level near the 1.1100 mark.”
Key notes
Forex Today: Risk rides the Navarro rollercoaster, Eurozone/ UK PMIs, virus stats in focus
EUR/USD: Scope for upside towards 1.1600 over the medium-term – Citibank
Coronavirus update: Germany’s death toll nears 9K, R-rate trends higher at 2.76
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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