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 52.5 in September from August’s 52.2 final print while the index for the services sector is seen expanding to 52.9 this month vs. 52.5 last.
The forecast for the Eurozone flash manufacturing PMI (due at 0800 GMT) shows 51.9 for September vs. 51.7 seen in the previous month. The Eurozone services sector PMI is seen steady at 50.5 in the reported month.
How could they affect EUR/USD?
The EUR/USD pair has bounced off two-month lows of 1.1672, still remains vulnerable at 1.1683, down 0.18% on the day.
“From a technical perspective, a subsequent fall below August monthly swing lows, around the 1.1695 region, might have already set the stage for further weakness. Hence, some follow-through slide towards testing the 1.1600 round-figure mark, marking the 50% Fibonacci level of the 1.1683-1.2011 positive move, now looks a distinct possibility. The downward trajectory could further get extended towards 61.8% Fibo. level, around the key 1.1500 psychological mark,” explains FXStreet’s Analyst Haresh Menghani.
“On the flip side, attempted recovery back above the 1.1700 mark now seems to confront stiff resistance near the 1.1735-40 horizontal support breakpoint,” Haresh adds.
Key notes
Eurozone September PMI Preview: Keeping the lockdown bump?
ECB’s Mersch: Not seeing a further deterioration on the front of prices and production
Europe set for a positive open as flash PMIs bring down the curtain on Q3
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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