When are the German/ Eurozone flash PMIs and how could they affect EUR/USD?
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 forecast for the Eurozone flash manufacturing PMI shows 54.6 for July, lower than previous month's reading of 54.9, and the Eurozone services sector is also expected to come in a tad weaker at 55.0 in the reported month versus 55.2 booked in June.
The flash manufacturing PMI for Germany is also expected to drop to 55.5 when compared to the final 55.9 result booked previously. While the index for the services sector is seen arriving at 54.3 this month versus 54.5 last.
How could they affect EUR/USD?
An upside surprise in the manufacturing PMI readings could offer a fresh boost to the EUR bull, which could send the EUR/USD pair back above the 1.1710 level (daily pivot). A break above which the momentum could accelerate towards 1.1744 (Jun 4 high). A sustained break above the last could open doors for a test of 1.1789/92 (monthly tops).
On the flip side, if the readings show a big-than expected drop, the spot could extend losses to test the support near the midpoint of the 1.16 handle, below which the next support is placed at July 20th low at 1.1626.
Key Notes
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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.