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 64.2 in July from June's 65.1 final print while the services sector is likely to expand to 59.1 in the reported month vs. 57.5 last.
The forecast for the Eurozone flash manufacturing PMI (due at 0900 GMT) shows 62.5 for July vs. 63.4 seen in the previous month. The Eurozone services sector PMI is seen improving to 59.5 in the reported month vs. June’s 58.3.
How could they affect EUR/USD?
The EUR/USD pair is holding the lower ground near 1.1770, as investors prefer to hold the US dollar amidst tepid risk sentiment while dovish ECB outcome weighs on the euro. At the time of writing, EUR/USD trades at 1.1769, almost unchanged on the day.
FXStreet’s Analyst, Haresh Menghani, notes: “It will still be prudent to wait for a sustained break below a short-term ascending trend-line – extending from September 2020 swing lows – before positioning for any further decline. The mentioned support is pegged near mid-1.1700s, below which the pair is likely to accelerate the fall towards YTD lows, around the 1.1700 mark touched in March. On the flip side, the 1.1800 mark now seems to act as an immediate strong resistance ahead of the overnight swing highs, around the 1.1830 area.”
Key notes
ECB's Villeroy: Totally justified to keep accommodative policy for now
EUR/USD retreats towards 1.1700 on confirmed death-cross, focus on PMI
EUR/USD still poised for further pullbacks – UOB
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.
