Market News & Analysis
European PMIs Surprise to upside
Joe Perry August 22, 2019 12:55 PM
With all the possible recession talk over the past few weeks, it was nice to see a glimmer of sunshine in the European Purchasing Manager’s Index (PMI), especially from the Germany, the powerhouse of the European Union. The DAX paired losses. However, for the Euro, the excitement was brief. Although the data was better than expected, it still remains well below 50.
ALL the PMI data from the EU came in better than expected:
Source: City Index
As the data was released, notice how the EUR/USD bid up, in hopes that the next country’s data to be released would be better than expected as well. However, once the overall EU PMI was released, the market used that opportunity to sell Euros and buy US Dollars. (I’ll let the short-term price action speak for itself).
Source: Tradingview, City Index
With only Initial Jobless Claims and the US PMI data left on todays calendar, it appears the market may be gearing up for the possibility of a less dovish Powell tomorrow when he speaks at Jackson Hole, as the FOMC July 31st minutes released yesterday were also taken as less dovish.
In the meantime, watch for resistance in the EUR/USD near today’s high at 1.1113, and then at horizonal resistance near 1.1160. Support comes in at 1.1030, which was the August 1st low and they 161.8% Fib extension from the August 15th 2018 low to the September 21st 2018 high. Below that, there is room down to trendline support near 1.0900!
Source: Tradingview.com, City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.