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 52.0 for December vs. 51.8 seen in the previous month. The Eurozone services sector PMI is seen a tad firmer at 53.4 in the reported month versus 53.3 last.
The flash manufacturing PMI for Germany is seen arriving at 52.0, up from 51.8 booked previously while the index for the services sector is expected to tick higher to 53.4 this month versus 53.3 seen in the previous month.
How could they affect EUR/USD?
Upbeat manufacturing PMI readings could trigger a minor bounce in the Euro that could drive the EUR/USD pair back to the 1.1370 level. A break above which the recovery momentum could gain traction, with eyes set on 1.1400 (round number/ 50-DMA). A sustained break above the last could open doors for a test of 1.1454 (daily classic R3).
On the flip side, if the readings show an unexpected drop, the spot could head further south in a bid to test the 1.1300 level, below which the next supports are placed at 1.1264 (Nov 28 low) and 1.1216 (Nov 13 low).
Key Notes
Eurozone PMIs and US retail sales amongst market movers today – Danske Bank
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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