EURUSD Sentiment Broken After Feeble German and French PMIs
EURUSD Price, Chart and PMIs:
- EURUSD trades back below 1.1300
- German manufacturing PMI hits a six-and-a-half year low.
The Euro fell sharply Friday after the preliminary IHS Markit PMIs pointed to Q1 GDP growth of just 0.2% in the Euro-Zone, due largely to a sharp contraction in manufacturing activity. All three French PMI fell below 50, the expansion/contraction level, while German manufacturing activity hit a six-and-a-half year low.
Commenting on the flash Euro-Zone PMI data, Chris Williamson, chief business economist at IHS Markit said: “The eurozone economy ended the first quarter on a soft note, with the flash PMI running at one of the lowest levels seen since 2014. The survey indicates that GDP likely rose by a modest 0.2% in the opening quarter, with a decline in manufacturing output in the region of 0.5% being offset by an expansion of service sector output of approximately 0.3%”.
EURUSD fell briefly back below 1.1300 after the release the French and German numbers – having touched a recent high of 1.1450 post-FOMC on Wednesday - and is now below all three moving averages. The pair have moved out of overbought territory and may now struggle either side of the 1.1300 handle in the short-term.
EURUSD Daily Price Chart (July 2018 – March 22, 2019)
Retail traders are 47.9% net-long EURUSD according to the latest IG Client Sentiment Data, a bullish contrarian indicator. Recent changes in daily and weekly sentiment however give us a mixed trading bias for EURUSD.
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