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22 Apr 2016
German/ Eurozone flash PMIs preview: What to expect of EUR/USD?
The EUR/USD pair is consolidating the downside as dust settles after yesterday’s ECB decision-induced volatile session. The main currency pair keeps the recovery mode intact from near 1.1270 troughs and hovers around 1.1300 levels amid mixed sentiment and broad based US dollar retreat. However, further upside remains capped as the traders remain on the back of ahead of a raft of flash manufacturing and services PMIs from the Euro area economies lined up for release 07.30GMT onwards.
New German business orders to slow further in April?
Amongst the Euro are economies, the PMI reports from Germany and Eurozone as an entire bloc holds more significance, in terms of its impact on the European currency and the markets as well.
The forecast for the Eurozone flash manufacturing PMI shows 51.7 for March, slightly higher than the 51.6 recorded a month ago, and the Eurozone services sector is also expected to show a higher result of 53.2 from the final 53.1 reported in March.
The flash manufacturing PMI for Germany is expected to register a slightly better 50.9 figure compared to the final 50.7 result recorded in March. However, the index for the services sector is expected to stay unchanged at 55.1 as the final figures reported in March.
German manufacturers ended their worst quarter in over a year in March, with overall growth in the sector gradually picking up. Although production growth was maintained, the pace of expansion was little-changed from February's 14-month low.
The new business growth slowed further and workforce numbers fell for a second month in a row last month. Hence, what remains to be seen is, despite expectations of a better manufacturing PMI reading, the new orders and employment numbers continue to remain sluggish in April.
EUR/USD Technical Level
At 1.1300, the pair finds the immediate resistance at 1.1350 (20-DMA/ round number). A break beyond the last, doors will open for a test of 1.1393/1.1400 (Apr 13 High/ psychological levels). On the flip side, the immediate support is placed at 1.1271/64 (Apr 21 & 13 Low) below which at 1.1206 (50-DMA) could be tested.
New German business orders to slow further in April?
Amongst the Euro are economies, the PMI reports from Germany and Eurozone as an entire bloc holds more significance, in terms of its impact on the European currency and the markets as well.
The forecast for the Eurozone flash manufacturing PMI shows 51.7 for March, slightly higher than the 51.6 recorded a month ago, and the Eurozone services sector is also expected to show a higher result of 53.2 from the final 53.1 reported in March.
The flash manufacturing PMI for Germany is expected to register a slightly better 50.9 figure compared to the final 50.7 result recorded in March. However, the index for the services sector is expected to stay unchanged at 55.1 as the final figures reported in March.
German manufacturers ended their worst quarter in over a year in March, with overall growth in the sector gradually picking up. Although production growth was maintained, the pace of expansion was little-changed from February's 14-month low.
The new business growth slowed further and workforce numbers fell for a second month in a row last month. Hence, what remains to be seen is, despite expectations of a better manufacturing PMI reading, the new orders and employment numbers continue to remain sluggish in April.
EUR/USD Technical Level
At 1.1300, the pair finds the immediate resistance at 1.1350 (20-DMA/ round number). A break beyond the last, doors will open for a test of 1.1393/1.1400 (Apr 13 High/ psychological levels). On the flip side, the immediate support is placed at 1.1271/64 (Apr 21 & 13 Low) below which at 1.1206 (50-DMA) could be tested.