Presentation of German flash PMI / euro zone
Among eurozone economies, German PMI and composite eurozone reports are more relevant in terms of their impact on the European currency and related markets.
The flash manufacturing PMI for Germany, expected at 07:30 GMT, is expected to rebound to 39.2 in May compared to the final version of 34.5 in April, while the services sector index should rise to 26.6 this month by 16.6 burden.
The forecasts for the flash manufacturing PMI of the euro zone (expected at 08:00 GMT) indicate 38.0 for May against 33.4 seen the previous month. The euro area service sector PMI is expected to rebound to 25.0 in the month compared to the previous 12.0.
How could they affect EUR / USD?
The PMI results should suggest an economic recovery in the eurozone, as economies reopen following the coronavirus outbreak.
If the data were to see a larger than expected rebound, the EUR / USD could reverse the corrective slide and rebound to the 1.1000 level. A break below the last one, the rates would target the highest of May / 200-DMA around 1.1020. The next resistance awaits at 1.1050, the psychological level.
On a negative surprise, the spot could extend the losses towards the 5-DMA support to 1.0918, below which the 1.0900 / 1.0890 (round number / 50-DMA) could be tested.
As of press time, the EUR / USD pair is snaking near the daily lows of 1.0951, losing 0.17% on the day.
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About German / Eurozone Flash PMIs
The manufacturer purchasing managers index (PMI) published by the Markit Economics captures trading conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of economic conditions and the general economic situation in the euro area. Usually, a result above 50 signals is bullish for the euro, while a result below 50 is considered bearish.