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 PMI reports from Germany and Eurozone as an entire bloc hold more relevance, in terms of its impact on the European currency and the markets as well.
The forecast for the Eurozone flash manufacturing PMI shows 58.3 for November, slightly lower than the 58.5 recorded a month ago, and the Eurozone services sector is expected to come in a tad firmer at 55.1 in the reported month when compared to 55.0 booked in October.
The flash manufacturing PMI for Germany is expected to tick lower to 60.4 when compared to the final 60.6 result booked previously. While, the index for the services sector is expected to improve to 55.0 in November, against 54.7 last.
How could affect EUR/USD?
A positive surprise in the manufacturing PMI reports could add extra legs to the ongoing rally in the EUR, opening doors for a test of 1.1884 (classic R2/ Fib R3), beyond which 1.1900 levels could be tested, paving way for a test of 1.1950 (psychological levels).
On the flip side, if the readings show a big-than expected drop, the spot could drop below 1.1800 (round number/ 100-DMA), below which 1.1769/67 (5 & 10-DMA) could be tested.
The reaction to the PMI releases may remain limited, as markets remain focused on the ECB monetary policy meeting minutes due for release at 1230GMT.
Eurozone: Focus on PMIs and ECB Minutes - TDS
EUR/USD Forecast: bullish theme back in play, EZ PMIs/ECB minutes eyed
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.