German/ Eurozone flash PMIs Overview
Amongst the Euro area economies, the German and the composite Eurozone PMI reports hold more relevance, in terms of their impact on the European currency and the related markets as well.
The flash manufacturing PMI for Germany, due at 0830 GMT, is seen a tad weaker at 65.9 in May from April's 66.2 final print while the services sector is likely to expand, with a 52.0 figure seen this month vs. 49.9 last.
The forecast for the Eurozone flash manufacturing PMI (due at 0900 GMT) shows 62.5 for May vs. 62.9 seen in the previous month. The Eurozone services sector PMI is seen improving to 52.3 in the reported month vs. April’s 50.5.
How could they affect EUR/USD?
The EUR/USD pair is holding the higher ground near 1.2240, as the US dollar resumes decline to test the multi-month lows of 89.69, at the time of writing.
FXStreet’s Analyst, Haresh Menghani, notes: “A subsequent move beyond the 1.2240-45 horizontal resistance will reaffirm the constructive set-up and allow bulls to aim back to reclaim the 1.2300 mark. The momentum could further get extended towards YTD tops, around mid-1.2300s touched on January 6. On the flip side, the 1.2200 round-figure mark now seems to protect the immediate downside. Any subsequent fall might still be seen as a buying opportunity near a previous strong resistance breakpoint, now turned support near the 1.2160-70 region.”
Key notes
Elliott Wave View: EURUSD looking to end a diagonal [Video]
UK Retail Sales and flash PMIs in focus
EUR/USD Weekly Forecast: Fed may fuel the next leg of rally, bulls eye 1.2240
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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