Look out traders! On Friday the 23rd of July, the Euro will be printing their monthly PMI data so 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.
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.
Summary of Previous Report:
France contracted in Manufacturing PMI printing at 58.6 in May vs 59.4 in April
France expanded in Services PMI printing at 57.4 in May vs 56.6 in April
Germany expanded in Manufacturing PMI printing at 64.9 in May vs 64.4 in April
Germany expanded in Services PMI printing at 58.1 in May vs 52.8 in April
The Eurozone stayed the same in Manufacturing PMI printing at 63.1 in May vs 63.1 in April
The Eurozone expanded in Services PMI printing at 58.0 in May vs 55.2 in April
As a whole, the Euro has expanded significantly in their PMI readings. The Eurozone is doing very well combatting the pandemic and the crisis it's caused on their economy. However, we're now beginning to see a significant recovery.
What's Expected Now:
France to contract in Manufacturing PMI from 59.0 in May to 58.4 in June
France to expand in Services PMI from 57.8 in May to 58.7 in June
Germany to contract in Manufacturing PMI from 65.1 in May to 64.2 in June
Germany to expand in Services PMI from 57.5 in May to 59.4 in June
The Eurozone to contract in Manufacturing from 63.4 in May to 62.6 in June
The Eurozone to expand in Services PMI from 58.3 in May to 59.4 in June
We're expecting to see another round of potential declines in Manufacturing PMI's all round, however we're also expecting to see another round of potential inclines in Service PMI's all round too. This could potentially mean we won't see a very one-sided direction following the results as half is expected to be good news, and the other half is expected to be bad news.
Impact on EUR/USD:
If the results come out as expected, I'm expecting high volatility in both directions. As mentioned, this is mainly because we're expecting a decline in Manufacturing PMI but an incline in Service PMI's. So it's good news mixed with bad news. There likely will be spikes, but I'm expecting this is both directions. I would suggest looking out for the released actual numbers before deciding to trade this event.
Save time looking for setups with the EdgeFinder's watchlist! In a glance, see the EdgeFinder's current top buys and top sells.
The dollar flew higher last week as a result of resilient economic news along with a higher PCE than expected. Now the DXY has reached a decision point in price action. This week's NFP will help determine the sentiment around the potential June rate hike. Here is what we are looking at: EdgeFinder Analysis USDCAD […]
Considerably dovish news from central banks in the US and New Zealand has caused a major stir in the markets. Governor Orr and Vice Chairman Powell both released some reassuring news for the economy in the long term. But what does this mean for USD and NZD? EdgeFinder Analysis GBPNZD is a pair that should […]
As we trade into a broad news week covering the economic status of multiple countries, there are several scenarios we should consider. Although it is impossible to predict the future, we can at least prepare for the news events set to come this week for kiwi, dollar and the pound. EdgeFinder Analysis GBPJPY still maintains […]
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