When are the German/ Eurozone flash PMIs and how could they affect EUR/USD?

Dhwani Mehta FXStreet

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 48.0 in July from June’s 45.2 final print while the index for the services sector is seen expanding to 50.5 this month vs. 47.2 last.

The forecast for the Eurozone flash manufacturing PMI (due at 0800 GMT) shows 50.0 for July vs. 47.4 seen in the previous month. The Eurozone services sector PMI is seen bouncing to 51.0 in the reported month vs. 48.3 previous.

How could they affect EUR/USD?

The EUR/USD pair has bounced back above 1.1600, now trading at 1.1610, up 0.13% on the day.

“From a technical perspective, the near-term bias seems tilted firmly in favour of bulls. However, the pair’s inability to capitalize on the move/sustain above the 50% Fibonacci level of the 1.2555-1.0636 downfall warrant some caution before placing aggressive bullish bets amid overbought conditions on the daily chart. That said, some follow-through buying beyond the overnight swing high, around the 1.1625 region, now seems to accelerate the momentum towards the 1.1700 round-figure mark. The pair might then aim to test the next major hurdle near the 1.1745-50 region,” explains FXStreet’s Analyst Haresh Menghani.

“On the flip side, immediate support is now pegged near the 1.1540 level, below which the pair could accelerate the slide further towards the key 1.1500 psychological mark,” Haresh adds.

Key notes

Eurozone PMIs Preview: Return to expansion territory to complete EUR/USD bullish week

EU Parliament not ready to swallow EU budget cuts (yet)

Euro rallies 9 out of last 10 days, is 1.20 next?

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.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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