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 flash manufacturing PMI for Germany, due at 0830 GMT, is seen arriving at 44.5 in January, up from December’s 43.7 final print while the index for the services sector is seen a tad firmer at 53.0 this month vs. 52.9 last.
The forecast for the Eurozone flash manufacturing PMI (due at 0900 GMT) shows 46.8 for January vs. 46.3 seen in the previous month. The Eurozone services sector PMI is seen steady at 52.8 in the reported month.
How could they affect EUR/USD?
On a downside surprise, the spot could meet fresh supply and fall back to test the post-ECB policy decision lows at 1.1036, a break below which could open floors towards the December 2019 lows of 1.1003. Selling pressure will intensify should the bulls fail to defend the last, exposing the November lows of 1.0981.
Should the data better estimates, the rates could bounce back towards the 100-DMA at 1.1072, above which the next upside target awaits at 1.1102, the confluence of 10 and 50-DMA.
At the press time, the EUR/USD pair is seen hovering around 1.1050, almost unchanged on the day.
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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.