EUR/USD Overlooks PMI Results Despite Manufacturing At 13-Months Low
- Eurozone Manufacturing PMI (Sep P): 50.5 Actual Vs 50.6 Estimated; 50.7 Prior.
- Eurozone Services PMI (Sep P): 52.8 Actual Vs 53.0 Estimated; 53.1 Prior.
- EUR/USD Remains Relatively Muted Despite Weaker-Than-Forecast PMI Figures.
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According to Markit, the Eurozone Manufacturing PMI in September came in at 50.5 compared to 50.7 in the prior month. It is the slowest expansion in 13-months and missed market expectations of 50.6. Moreover, Eurozone Services PMI accelerated at 52.8 for September versus 53.1 in August. It also missed market forecasts calling for a print of 53.0. A reading above 50.0 represents an expansion of the manufacturing sector and below 50.0 indicates a contraction.
Ahead of the PMI data, the Euro held steady against the US Dollar at around the 1.2850 level. Soon after the release, EUR/USD was relatively muted and continued to trade firmly below the psychologically important 1.2900 level.
Progressing ahead, September’s US Manufacturing PMI will be in focus as it crosses the wires at 13:45 GMT later today. The market is expecting the US manufacturing industry to have accelerated at 58.0 in September, which is slightly higher from an acceleration of 57.9 in August. Any print that exceeds market forecasts will add fuel to the US Dollar. The US Dollar has been up for the last 10-weeks and this momentum may continue as US data strengthens.
From a technical panorama, Ilya Spivak mentions near-term support to rest at 1.2783 (38.2 percent Fib Exp.) and resistance at 1.2864 (23.6 percent Fib Exp.).He is short EUR/USD at 1.3644 in line with his long-term fundamental outlook. Meanwhile according to DailyFX Speculative Sentiment Index, the ratio of long to short positions in the EUR/USD stands at 1.57 as 61 percent of traders are long.
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Edward Hyon, DailyFX Research Team
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