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 50.3 for February vs. 50.5 seen in the previous month. The Eurozone services sector PMI is seen a tad firmer at 51.4 in the reported month versus 51.2 last.
The flash manufacturing PMI for Germany is seen arriving at 49.7 in February, unchanged from January’s final print while the index for the services sector is expected to tick slightly lower to 52.9 this month versus 53.0 seen in the previous month.
How could they affect EUR/USD?
Upbeat manufacturing PMI readings could help the EUR/USD pair retest 1.1372 (Feb 20 high). Above which the upside momentum could gain traction, with eyes set on 1.1400 (round number). A sustained break above the last could open doors for a test of 1.1450 (psychological levels).
On the flip side, if the readings disappoint the consensus forecasts, the spot could head further south in a bid to test the 1.1300 demand zone, below which the next supports are placed at 1.1274 (Feb 19 low) and 1.1233 (YTD lows).
Key Notes
Market themes of the Day: Eurozone PMIs set to stabilize after steep deceleration
EUR/USD Forecast: Vulnerable below 1.1400 handle, flash Euro-zone PMIs eyed for some impetus
EUR futures: pullbacks seem limited
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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