EUR/USD Hits A Session High After Eurozone PMI Surpises
- Eurozone Manufacturing PMI (Jul P): 51.9 Actual Vs 51.7 Estimated; 51.8 prior.
- German Manufacturing PMI (July P):52.9 Actual Vs 51.9 Estimated; 52.0 prior.
- EUR/USD Remains Firmly Below 1.3500 Level despite Positive Eurozone PMI.
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The preliminary Eurozone Manufacturing PMI came in at 51.9 for the month of July versus 51.8 print in the prior month. This reading was slightly above market expectations of 51.7 and showed an expansion for 13 consecutive months. A continued acceleration for the Eurozone’s manufacturing sector was again supported by Germany, the region’s powerhouse. Its manufacturing PMI registered at 52.9, which exceeded analysts’ forecast of 51.9. The PMIs are regarded as a reliable forward-looking indicators of the health of an economy. Importantly, both the manufacturing PMI reported held above the 50 mark which divides expansion from contraction.
Ahead of the data, the world’s most liquid currency pair, EUR/USD trimmed its earlier losses following a better-than-expected German PMI print to trade as high as 1.3474. Subsequent to the region-wide manufacturing PMI data release, the Euro remained relatively muted to trade near the session high of 1.3474. A further fall in the Euro may have been prevented as a positive PMI from the Eurozone slightly lifted the bets on a further expansion of ECB stimulus. But EUR/USD remains firmly below the key 1.3500 level.
Considering technical analysis, DailyFX Currency Strategist Ilya Spivak mentions near-term support rests at 1.3454 (50% Fib Exp.) and resistance at 1.3502-12 (38.2% Fib Exp.). He remains short EUR/USD at 1.3644 in line with the long-term fundamental outlook. Meanwhile according to DailyFX Speculative Sentiment Index, 56 percent of retail Forex traders are long EUR/USD.
EUR/USD 5 Minute Chart
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Edward Hyon, DailyFX Research Team
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