Look out traders! On Friday the 23rd of April, European countries will be printing their PMI data and here's what to expect...
The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. It consists of a diffusion index, which essentially summarises market conditions viewed by purchasing managers if they are expanding, staying the same or contracting. The PMI aims to provide information about current and future business conditions to company decision-makers, analysts, and investors.
PMI data is released by the Institute for Supply Management (ISM) and is based on a monthly survey sent to senior executives at more than 400 companies in 19 primary industries, which are then weighted by their contribution to the US GDP. The PMI is based on five major survey areas: new orders, inventory levels, production, supplier deliveries, and employment. The ISM weighs each of these survey areas equally. The surveys include questions about business conditions and any changes, whether improving, no changes, or deteriorating.
The headline PMI is a number from 0 to 100. A PMI above 50 represents an expansion when compared with the previous month. A reading below 50 represents a contraction, and a reading at 50 indicates no change compared to the previous month. The further away from 50, the greater the level of change.
Services PMI to contract from 48.2 to 46.6
Manufacturing PMI to contract from 59.3 to 59.0
Services PMI is predicted to come out worse than the previous month, and below 50.0 which represents a contraction. Manufacturing on the other hand is predicted to come out still as an expansion but worse by 0.3 compared to the previous month.
Services PMI to contract from 51.5 to 51.1
Manufacturing PMI to contract from 66.6 to 65.8
Services PMI is predicted to come out worse than the previous month, but still above 50.0 which represents an expansion. Manufacturing on the other hand is predicted to come out still as an expansion but worse by 0.8 compared to the previous month, but is way above 50.0 which is good for the currency.
What Does This Mean for EUR Pairs:
If we see the data come out as the forecast, we could see some mixed movements in the market. The data isn't all suggesting strong or weak, as some are hinting at strength but some are also hinting at weakness.
One thing for sure though, currently in the chart above, we have got a descending channel formed from a bullish flag pattern. Depending on the data set to come out, we could either see price break out this channel and look to complete the long-term chart pattern. We could see this data hint at weakness, and price could continue the channel and head towards the downside again.
Look out for the actual data, and use the explanations above to guide you where price could be heading next. Stay safe traders!
As this week comes to a close, we are looking ahead at future setups that could be some of the best opportunities for the next several trading sessions. Here are some pairs for next week that we are looking at. EUR/JPY Recent data has shown a slow down in the German manufacturing sector. With European […]
When it comes to testimonies, it's all in how you say it. Jerome Powell has to be very particular in the way he makes his statements and answers the ensuing questions. Here is what might be in store for the market in the coming days and weeks, and whether or not there will be more […]
The historically 'safe' currency to hold in times of recessions is in a unique situation now with a couple factors in place. Here is why the yen is stronger today as well as some trade setups that could push its value either up or down. Weaker Yen Now, Stronger Yen Later The Bank of Japan […]
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here