MarketPulse | Jun 22, 2018 06:45AM ET
Services PMIEUR/USD has posted gains in the Friday session, continuing the upward trend we saw on Thursday. Currently, the pair is trading at 1.1639, up 0.32% on the day. On the release front, the focus is on manufacturing and services PMIs. Germany and the eurozone posted Services PMIs of 53.9 and 55.0, respectively, both of which beat the estimates. On the manufacturing front, German Manufacturing PMI dropped to 55.9, missing the estimate of 56.3 points. Eurozone Manufacturing PMI softened to 55.0, matching the estimate. Later in the day, OPEC members meet in Vienna to discuss a proposal to raise oil production.
Led by the German locomotive, the eurozone economy continues to grow, although there was a hiccup in the first quarter. The ECB has given the economy a vote of confidence, with a decision to finally wind up its asset-purchase program at the end of 2018. The June PMI reports pointed to continued expansion in the manufacturing and services sectors, but all may not be well. The eurozone and German Manufacturing PMIs both slowed for a sixth straight month, and the German release was the weakest since December 2016. With global protectionism on the rise as the trade war worsens, German and eurozone exports could suffer, which in turn would have a negative impact on manufacturers. If upcoming PMIs continue to weaken, investor confidence in the eurozone could wane and weigh on the euro.
Central bankers converged in Sintra, Portugal this week, and the trade war between the U.S and its trading partners was high on the agenda. The United States and the EU have slapped tariffs on each other, and President Trump shook up global equity markets when he threatened to impose a 10 percent tariff on some $200 billion worth of Chinese goods. The heads of the central banks from the U.S and the European Union were united in the gloomy view of the trade conflict, with Federal Reserve Chair Jerome Powell saying that the changes in trade policy could force the Fed to “question its outlook”. ECB President Mario Draghi said that the trade spat could have negative consequences on monetary policy. If these protectionist measures force central banks to alter their monetary policy, this could have a significant impact on exchange rates.
EUR/USD Fundamentals
Friday (June 22)
*Key events are in bold
EUR/USD for Friday, June 22, 2018
EUR/USD for June 22 at 5:45 DST
Open: 1.1603 High: 1.1675 Low: 1.1600 Close: 1.1639
EUR/USD Technical
S1 | S2 | S1 | R1 | R2 | R3 |
1.1434 | 1.1553 | 1.1637 | 1.1728 | 1.1829 | 1.1910 |
EUR/USD has been breaking above resistance levels as it gains ground. The pair was flat in the Asian session and has posted gains in European trade
Further levels in both directions:
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