EUR/USD: PMI For Eurozone And U.S.
Yuri Papshev | Jun 23, 2017 10:15
Ambiguous data on the eurozone, published today at the beginning of the European session, caused a surge in volatility in the euro bid. Among the data was a preliminary index of supply managers (PMI) for the manufacturing and service sectors of the eurozone for June, as well as similar indices for two countries with leading economies of the eurozone (Germany, France). In general, the indicators came out with very positive values - above 50 - but some of them did not reach the forecast values. Thus, the preliminary PMI for the eurozone services sector for June was projected at 56.2, but came out at 54.7; a composite PMI for the production area of the eurozone for June came out with a value of 55.7 (projected at 56.6). The indices also turned out to be below the May figures.
Nevertheless, the euro continues to grow against the dollar since the beginning of today's trading day.
The US dollar as a whole is showing weakness today and is falling in the foreign exchange market.
The US Department of Commerce will today publish May data on sales of new homes, as well as preliminary PMI indices for the services sector and manufacturing sector for June, which will be published at 13:45 and 14:00 (GMT).
The PMI index is an important indicator of the business environment and the general state of the US economy. The indicator, exceeding the 50 mark, is generally a positive factor for USD. The growth of indicators is expected, which will support the dollar.
Meanwhile, investors seem to have taken a break before publishing important data on the US and continue to assess the results of the June Fed meeting. According to the quotes for the Fed rate futures tracked by the CME Group, the probability of another interest rate increase this year is estimated at less than 50%. Higher interest rates tend to support the US dollar.
At 18:15 (GMT), the speech of FOMC member Jerome Powell will begin. If Powell, as well as his other colleagues in the leadership of the Fed, speak in favour of a softer scenario of raising rates in the US, it will put additional pressure on the US dollar.
Meanwhile, the EUR/USD broke through the important short-term resistance level 1.1172 (200-period moving average on the 1-hour chart), however, further development of the upward movement in the pair may not occur.
If published today at the beginning of the US session, PMI indexes for the US will come out with positive indicators, then the dollar can quickly regain the positions lost in the first half of today's trading day.
The EUR/USD may again fall below the short-term support level 1.1150 (144-period moving average on the 4-hour chart) to support level 1.1120 (200-period moving average on the 4-hour chart). As long as the pair is above the level of 1.1120, its positive dynamics remains.
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Support levels: 1.1155, 1.1120, 1.1080, 1.1000, 1.0950, 1.0915
Resistance levels: 1.1172, 1.1190, 1.1230, 1.1280, 1.1340, 1.1600
Trading recommendations
Sell Stop 1.1160. Stop-Loss 1.1195. Take-Profit 1.1155, 1.1120, 1.1080, 1.1000, 1.0950, 1.0915
Buy Stop 1.1195. Stop-Loss 1.1160. Take-Profit 1.1230, 1.1280, 1.1340, 1.1600
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