When are German/ Eurozone flash PMIs and how could they affect EUR/USD?

German/ Eurozone flash PMIs Overview

Amongst the Euro are economies, the PMI reports from Germany and Eurozone as an entire bloc hold more relevance, in terms of its impact on the European currency and the markets as well.

The forecast for the Eurozone flash manufacturing PMI shows 57.8 for October, slightly lower than the 58.1 recorded a month ago, and the Eurozone services sector is also expected to inch lower to 55.6 vs. 55.8 booked in September.

The flash manufacturing PMI for Germany is expected to tick lower to 60.2, when compared to the final 60.6 result booked previously. While, the index for the services sector is expected to remain unchanged at 55.6 in September.

How could affect EUR/USD?

A positive surprise in the manufacturing PMI reports could offer extra legs to the ongoing bullish momentum in EUR/USD, which would lift the rate closer towards 1.1800 levels, beyond which 1.1850/58 (psychological levels/ 50-DMA) could be tested, paving way for a test of 1.1875/82 (Oct 13 & 12 tops). 

On the flip side, if the readings show a big-than expected drop, the spot could drop back to the key support zone near 1.1730, below which 1.1700 (round number) could be tested.

Key notes

Eurozone: Looking for a slightly better outcome for October flash PMIs - TDS

Eurozone: Focus on PMIs – Danske Bank

About German/ Eurozone flash PMIs

The Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the Euro Zone. Usually a result above 50 signals is bullish for the EUR, whereas a result below 50 is seen as bearish.