PMI services up on Europe; but Euro doesn’t react
InvestingOnline.com
4/07/2018, 13:36Europe got a bath of PMI services and composite indexes published today, and despite upbeat numbers across the continent, the Euro failed to reach new highs, and it is trading negative.
News coming from Germany said PMI service rose to its highest level in 4 months after it published a better than expected 54.5 number for June, well above May’s figure of 52.1.
According to the Purchasing Manager Index release by Markit, “By sector, the strongest performer remained Post & Telecommunications. The data also showed robust gains in activity across Hotels & Restaurants, Financial Intermediation and Transport & Storage. Renting & Business Activities maintained a steady solid rate of expansion, while Other Services – which includes health, education and recreational activities – remained close to stagnation.”
The PMI composite in Germany rose to 54.8 in June, better than the 53.4 posted in May and well above expectations of 54.2. According to the press release, “the upturn in performance in the service sector in June was partly driven by stronger inflows of new business, which survey evidence suggested was underpinned by firmer domestic demand.”
As an educational addon, remember that any PMI number above 50 indicates expansion in the sector, while a number below 50 signals contraction in the orders made by the managers.
Eurozone PMI reach further highs
Eurozone services PMI rose to 55.2 in June, better than the 55.0 expected by the market and the May final number of 53.8.
Composite PMI advanced to 54.9, above expectations of 54.8 and an increase from May’s number of 53.8.
EUR/USD contained by moving averages; waiting for a trigger
EURUSD daily chart July 4
The Euro didn’t react at all after the data as the EUR/USD is contained by the 1.1690 line and pegged to the 20-day moving average. Forex market is trading today in small ranges as the United States is celebrating its Independence Day.
EUR/USD looks trapped in a small range between 1.1630 and 1.1675 as the 4-hour chart is showing a pair contained by the 200-period moving average. There is an asymmetrical triangle com June 28 lows at 1.1530 and the 200-period MA.
The neutral tone for the EUR/USD remains on place; thought investors could consider a potential downside risk for the pair. In this case, check for the bottom of the range first, and then watch out for the 1.1560.
To the upside, the euro needs a close above the 1.1680 line to give hopes to bulls, but the confirmation would come with the break of the 1.1715 area.
