top of page

Title: EUR/USD builds a cushion around 0.9940, downside looks likely ahead of German/US PMIs

  • Writer: analysiswatch
    analysiswatch
  • Aug 23, 2022
  • 2 min read

August 23, 2022 12:14 AM ET


By: AnalysisWatch


The EUR/USD pair is trying to build a base around 0.9940 after a vertical decline on Monday. The major was auctioned in a narrow range of 0.9933-0.9950 during the Asian session, but is likely to break lower on lower expectations for German PMI data. On Monday, the asset recorded severe losses after losing the magic number of 1.0000.


According to preliminary estimates, the S&P Global/BME German Manufacturing PMI will come in at 48.3, which is lower than the previous release of 49.3. Similarly, the services PMI is expected to come in at 49, down from 49.7 previously. It should be noted that Germany is a key member of the European Union (EU) and a drop in the German PMI will have a significant impact on the common currency.


In addition, investors should be aware that the Manufacturing PMI has been in a consecutive decline since February of this year. A further decline in economic data would strengthen the chances of a recession in Germany. In addition, Russia will halt natural gas deliveries to Europe for three days in August to perform unscheduled maintenance work under the Baltic Sea on its way to Germany. The unexpected reduction in natural gas supplies to Germany through the Nord Stream 1 pipeline will accelerate the imbalance in the energy supply and demand mechanism and may cause the common currency to fall.


On the dollar front, the U.S. Dollar Index (DXY) is posting a moderate performance during the Asian session. The asset is expected to remain sideways as it awaits US PMI data. The S&P Global Manufacturing PMI is estimated to come in at 51.5, which is lower than the previous print of 52.2. On the other hand, the service PMI will improve significantly to 49.1 from 47.3 previously.

Comments


2b94f773-a237-4da7-a599-6b42314ed9e6.png

Risk Disclosure: AnalysisWatch will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.
AnalysisWatch would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore AnalysisWatch doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.

bottom of page