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 54.4 for September, lower than previous month's reading of 54.6, and the Eurozone services sector PMI is expected to stay unchanged at 54.4 in the reported month.
The flash manufacturing PMI for Germany is also expected to drop to 55.7 when compared to the final 55.9 result booked previously. While, the index for the services sector is seen arriving at 55.0 this month, the same as that seen in the previous month.
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 push the EUR/USD pair above the 1.1800 level (round number). A break above which the bullish momentum could accelerate towards 1.1853 (June highs). A sustained break above the last could open doors for a test of 1.2000 (psychological levels).
On the flip side, if the readings show a big-than expected drop, the spot could change course and drop to 1.1726/24 (Sept 18 & 14 tops), below which the next supports are placed at 1.1700 (key support) and 1.1672 (10-DMA).
Key Notes
Eurozone: Upside risks for PMIs data - TDS
Eurozone: PMIs to stabilise around their current levels – Danske Bank
EUR/USD: Bullish bias strengthens ahead of Eurozone preliminary PMI releases
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.