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EUR/USD Rises as Euro Area April Services Grows at Fastest Pace Since June 2011

EUR/USD Rises as Euro Area April Services Grows at Fastest Pace Since June 2011

2014-05-06 08:39:00
David Maycotte,
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Talking Points:

  • Eurozone Composite In-Line with Previous Estimates
  • Euro Extended its Gains Against the US Dollar
  • Focus Turns to ECB Monetary Policy Statement Later This Week

The regional Eurozone Composite PMIconfirmed preliminary estimates showing manufacturing- and service-sector activity grew at the fastest pace in three years. However, the positive figures may not be enough to support the Euro or the case for a Eurozone recovery. “[The] upbeat cyclical cues may not have a lasting positive impact on the single currency however as anemic inflation readings continue to fuel ECB stimulus bets,” says DailyFX Strategist Ilya Spivak, “the proximity of this week’s policy announcement from ECB President Mario Draghi and company may further undermine conviction, hinting the standstill may for now continue.” The ECB is expected to maintain its cash rate at 0.25 percent and its lending rate unchanged at 0.75 percent.

Release

Actual

Expected

Prior

Eurozone Markit Composite PMI (APR F)

54.0

54.0

54.0

Eurozone Markit Services PMI (APR F)

53.1

53.1

53.1

DailyFX Strategist Ilya Spivak broadly favors selling the Euro in line with his long-term fundamental outlook, but attempting to trade this view at the moment looks unattractive from a risk/reward consideration given the narrow range now in play.

EURUSD Daily Chart From EUR/USD Technical Analysis – Struggling to Find Direction

EUR/USD Rises as Euro Area April Services Grows at Fastest Pace Since June 2011

Daily Chart Prepared by Ilya Spivak using FXCM Marketscope 2.0.

-- Written by David Maycotte, DailyFX Research Team. Questions, comments or concerns can be sent to instructor@dailyfx.com.

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