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 65.0 in August from July's 65.9 final print while the services sector is likely to expand to 61.0 in the reported month vs. 61.8 last.
The forecast for the Eurozone flash manufacturing PMI (due at 0900 GMT) shows 62.0 for August vs. 62.8 seen in the previous month. The Eurozone services sector PMI is seen steady at 59.8 in the reported month.
How could they affect EUR/USD?
The EUR/USD pair is holding the higher ground near 1.1720, as investors dump the safe-haven US dollar amid the upbeat market mood. The spot is adding 0.21% on a daily basis, as of writing.
Aayush Jindal at Titan FX notes: “It is now approaching the 1.1720 resistance, and it is well below the 100 simple moving average (red, 4-hours) and the 200 simple moving average (green, 4-hours). There is also a major bearish trend line forming with resistance near 1.1725 on the same chart. The next resistance sits near 1.1735 or the 50% Fib retracement level of the downward move from the 1.1804 high to 1.1663 low. On the downside, the pair is likely to remain stable above 1.1665. A downside break below 1.1665 could start another decline. The next major support is near the 1.1600 level.”
Key notes
EUR/USD advances towards 1.1750 amid notable USD supply, ahead of PMIs
EUR/USD still risks a move to 1.1600 – UOB
Top 10 Global Cycle Indicators: PMI's to continue lower
About German/ Eurozone flash PMIs
The Manufacturing Purchasing Managers Index (PMI) released by 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.
