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

German/ Eurozone flash PMIs Overview

Amongst the Euro area economies, the German and the composite Eurozone PMI reports hold more relevance, in terms of its impact on the European currency and the related markets as well.

The forecast for the Eurozone flash manufacturing PMI shows 51.4 for January vs. 51.4 seen in the previous month. The Eurozone services sector PMI is seen a tad firmer at 51.5 in the reported month versus 51.2 last.

The flash manufacturing PMI for Germany is seen arriving at 51.3, down from 51.5 booked previously while the index for the services sector is expected to tick higher to 52.1 this month versus 51.8 seen in the previous month.

How could they affect EUR/USD?

Upbeat manufacturing PMI readings could help the EUR/USD pair regain the 1.1400 level. Above which the upside momentum could gain traction, with eyes set on 1.1424 (20-DMA). A sustained break above the last could open doors for a test of 1.1452 (100-DMA).

On the flip side, if the readings disappoint the consensus forecasts, the spot could head further south in a bid to test 1.1351 (Jan 23 low), below which the next supports are placed at 1.1300 (round number) and 1.1264 (Nov 28 low).

Key Notes

EUR/USD Forecast: Placed at a critical juncture ahead of the key risk event - ECB decision

Eurozone: Manufacturing PMI likely to print 50.7 in January – Danske Bank

ECB to leave policy on hold – TDS

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.