The market reacts in a more “sensitive” way to PMI exits
EUR / USD is currently maintaining levels of 1.0960-70, with price action centered around the 100-day MA (red line) @ 1.0968 still after the failure of the breakout of 1.1000 yesterday.
The French and German PMI surveys earlier have pretty much reaffirmed the current economic situation, that is, conditions in May are better than April, but they are still far from normal levels.
Again, remember, “doubling” of services and composite printing does not mean that business activity has actually improved twice. It just means that a higher proportion of companies report better conditions in May compared to April.
But these “best conditions” do not tell us how companies are doing compared to more normal times before the coronavirus crisis.
Anyway, let’s go back to the EUR / USD chart. It seems that the market has taken the news in hand and that the emphasis remains on the mood of risk for the party today.
European equities and US futures are even more flexible during the session, which is helping the dollar to hold slightly higher overall for the time being.
This helps the sellers, but it would be imperative for them to try to maintain a movement below the 100-day MA to create new bearish momentum before today’s close.
As far as buyers are concerned, the challenge is to stay above this 100-day MA and try to look towards a new 1.1000 grip test.
Risk humor is still the main driver at the moment, so keep an eye on stocks and their performance in upcoming sessions.