EUR/USD flat after PMI in Germany and Eurozone
InvestingOnline.com
24/07/2018, 13:36The euro rallied to an intra-day high around 1.1720 against the US dollar in the European morning; however, the EUR/USD was rejected at that level following PMI data, and it is now back to previous levels.
PMI manufacturing rose to 57.3 in July in Germany according to the Markit institute in its preliminary report. The number was above expectations of 55.5 and it is signaling more expansion than in June, where the figure was 55.9.
PMI services rose to 54.4 in July, better than the 543 but a setback from the 54.5 in June. PMI composite in Germany advanced to 55.2 in July, better than the 54.7 expected and the June number of 54.8.
Trevor Balchin, Economics Director at IHS Markit said: “Private sector output growth in Germany continued to regain momentum in July, having previously sank to a 20-month low in May. The manufacturing sector was the source of stronger growth in the latest month, after services had driven the expansion in June.”
On the Eurozone, the manufacturing PMI advanced to 55.1 in July from 54.9 in June. Better than the drop to 54.6 expected by the market.
On the other side, PMI services dropped to 54.4 in July from 55.2 in June. Lower than the 55.0 expected by the market. PMI composite in the Eurozone declined to 54.3 in July from 54.9 in June.
“Manufacturing output grew at a rate unchanged on June’s 19-month low, while business activity growth in the service sector pulled back from June’s four-month high, registering the second-slowest expansion seen in the past year-and-a-half,” the report says.
“A deterioration in growth of new orders suggests that the rate of expansion could slow again in August. Measured across both sectors, July saw the smallest increase in new orders since October 2016.”
EUR/USD reaction after PMI data
EURUSD daily chart July 24
On forex, EUR/USD is currently trading flat on the day at 1.1605, where the pair is testing the 20-hour moving average. Technical conditions in the short term suggest an overbought pair that is looking for more correction.
In the big picture, the EUR/USD is showing more upside potential as RSI is signaling more strength, but MACD is neutral. Moving averages are neutral.
