EURUSD, H1
Eurozone Composite PMI nudged marginally higher in August, indicating that the recovery is ticking along, but also that the pace of expansion remains modest with trade jitters increasingly weighing on the manufacturing sector. The manufacturing output PMI moved slightly in August, but the overall Manufacturing PMI dropped to a 21-month low of 54.6 from 55.1 in the previous month. The Services Index meanwhile improved to a 2-month high of 54.4 from 54.2 in July. The stock of unfilled orders is shrinking as new orders growth remains low compared to levels seen earlier in the cycle. So far the labour market has not been affected – employment growth hit a six-month high and is still running close to survey record rates. This was entirely driven by the services sector, however, with factor payroll growth slipping to a 17-month low. Meanwhile, higher wage growth and increased fuel, transport and commodity prices continue to contribute to elevated price levels. Overall then, the picture remains of continuing positive growth dynamics in the near term, with the services sector increasingly taking over as the main driver of consumption. Warning signs are flashing, however, and the balance of risks is steadily tilting towards the downside, given a medium term outlook of slowing growth amid elevated prices. Not a comfortable picture for ECB as it is preparing to phase out net asset purchases.
EURUSD moved down significantly overnight to post an Asian session low at 1.1542. The Eurozone PMI data helped the pair to a London top at 1.1574 before the USD found some traction and the pair moved lower, currently oscillating around the daily S1 level at 1.1558. Next Support is the lower Bollinger Band at 1.1532 and S2 at 1.1522. Initial Resistance sits on the 20 period moving average at 1.1577, the daily Pivot at 1.1590 and then R1 and the Fractal highs at 1.1625.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
[ujicountdown id=”Next Webinar” expire=”2018/08/23 15:00″ hide=”true” url=”” subscr=”” recurring=”” rectype=”second” repeats=””]
Stuart Cowell
Head Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
