EURUSD, H1
The Eurozone continues to confuse with mixed data this morning; The flash Markit Eurozone PMI hit a 16-month low of 52.9 in the May composite reading of the manufacturing and services surveys. This was slightly down on the 53.0 reading for April, and contrasts the median forecast for an improvement to 53.3. Markit says that the indicator points to Q2 GDP growth of 0.3%, would be an slowdown from Q1’s 0.5%. From among the components of the survey, the rate of new work in fell to the lowest level in 17 months, while the confidence reading for the services sector fell to a 10-month low.
Meanwhile Germany the area’s largest and most economy Flash PMI data for May beat expectations, with the composite of the manufacturing and services surveys rising to a 54.7 in the headline reading, up from 53.6 in April and exceeding the Bloomberg median for a more modest rise to 53.9. Markit advises caution, however, as “there was evidence that some companies raised activity levels in order to process backlogged work, rather than as a result of rising new business,” also noting a slowing pace of improvement in new orders.
Technically, it looks like 1.1200 beckons with a lot of volatility around this significant round number. The Daily has 100 DMA at 1.1160 and 200 DMA below 1.1120. The 1 Hour chart appears a little range bound in a tight 35 pip range between 1.1230 – 1.1195. The generally weak EUR data has not helped the buyers this morning.
Janne Muta
Chief Market Analyst
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