EURUSD Price Struggling as PMI Data Warns of Feeble Q1 EZ Growth
PMI Data, EURUSD Price, Analysis and Chart:
- Data suggest tepid Euro-Zone Q1 growth.
- German export orders fall to a six-year low.
- EURUSD trapped between initial pivot point support and resistance.
A mixed bag of Euro-Zone PMIs with the services sector picking up and beating albeit low expectations, while the manufacturing sector, especially in Germany, fell sharply lower, adding to ECB policy makers concerns over slowing growth. There has been increased talk of late that the ECB may re-launch TLTROs sooner rather than later to help kick-start the economy.
Commenting on the flash PMI data, Chris Williamson, chief business economist at IHS Markit said: “The Eurozone economy remained close to stagnation in February. The flash PMI lifted only slightly higher during the month, continuing to indicate one of the weakest rates of expansion since 2014. The survey data suggest that GDP may struggle to rise by much more than 0.1% in the first quarter.”
Germany’s service sector drove an increase in overall business activity across the eurozone’s largest member state in February, according to Markit, however the country’s outwardly-focussed manufacturing sector “slipped further into contraction as export orders fell to the greatest extent for over six years”. German Ifo data, out tomorrow, will now come under even closer scrutiny.
IG Client Sentiment data currently shows retail are 62.5% net-long EURUSD, a bearish contrarian indicator. However, the combination of current sentiment and recent changes suggest EURUSD may move higher.
The EURUSD chart continues to show the pair struggling to break higher, despite the recent weakness in the US dollar. On the one-hour chart the pair are currently bouncing between R1 and S1 pivot points and will likely need fresh stimulus to help break the short-term trading range.
EURUSD One Hour Price Chart (February 8 - 21, 2019)
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