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 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.

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.

EUR/USD stays well offered below 1.1800

The selling pressure on EUR/USD is picking up pace, with the pair slipping decisively below the key 1.1800 level and sliding to fresh two week lows as Wednesday’s session draws to a close. The move lower comes as the US Dollar finds renewed strength after the latest round of US data and the release of the FOMC Minutes. Next of note on the docket will be the US weekly Initial Jobless Claims.

GBP/USD reaches multi-day lows near 1.3500

GBP/USD reverses its initial upside momentum and is now adding to previous declines, approaching the 1.3500 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold battle to regain $5,000 continues

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs near the $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Bitcoin has found or is near a bottom, extended consolidation to follow: K33

Bitcoin (BTC) is nearing or has already established a bottom, which could be followed by a sustained period of slow price movement, according to K33.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.