EURUSD Slides After Euro-Zone PMIs Disappoint
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Euro and PMIs:
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Euro-Zone PMIs Miss Expectations as Growth Falters in the Single-Bloc
The November Markit PMIs highlighted that business activity in the euro area grew at its weakest level in nearly four years on weaker order book growth and slipping exports. According to Markit, the slowdown in business activity was most pronounced in the manufacturing sector where output rose only ‘marginally’.
Chris Williamson, chief business economist at IHS Markit noted: “The cooling of Eurozone business growth to a four year low adds to signs that the economy faces a disappointing end of the year. Manufacturing remains the main area of weakness, linked in part to having been hit hard once again by deteriorating exports.”
He added, “As such, the survey data suggest that the weakness of GDP in the third quarter may not have been a blip, and that the underlying trend is one of slower economic growth. The PMI readings so far in the fourth quarter are indicative of 0.3% GDP growth, with forward-looking indicators such as new orders and future expectations remaining worryingly subdued.”
The two-month downtrend in EURUSD remains in place with the pair currently quoted at 1.13770, just above the 20-day moving average. Further support cuts across at 1.1301 while resistance is seen at 1.1448 and 1.1508.
EURUSD Daily Price Chart (March – November 23, 2018)
IG Client Sentiment Data shows investors are currently 51.0% net-long EURUSD – a contrarian bearish signal – however recent daily and weekly positional shifts give us a mixed URUSD trading bias.
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