Purchasing managers’ indices in the euro-zone fell short of expectations, with the services sector in the whole region being the biggest disappointment. This gave the euro another push down, extending the big losses that followed Bernanke.
EUR/USD made a dive from almost 1.38 to 1.3570 after Bernanke announced Operation Twist but nothing else. and traded between 1.3530 and 1.36 afterwards. The consolidation now gives way to fresh falls although support is strong here, close to the lowest level in 7 months.
France: services PMI fell to 52.5 points from 56.8 points last month and lower than 54.4 that was expected. That’s a sharp fall. Manufacturing PMI dropped from 49.1 to 47.3 below 48.6 that was expected. These numbers, under 50 mean contraction.
Germany: Europe’s largest economy saw a drop in the services sector from 51.1 to 50.3 points, a bit below 50.6 that was predicted. The manufacturing sector stalled at 50 points, a bit under 50.2 that was expected and below last month’s 50.9 points.
Euro-zone: The services sector fell into contraction – Services PMI dropped sharply from 51.5 to 49.1 points, below the critical 50 point mark. A small slide to 51.1 was expected. Manufacturing PMI slid from 49 to 48.4 points, just below 48.6 that was expected.
EUR/USD is now at 1.3520. Support is quite strong here. The pair dived to 1.3495 on September 12th, and this is very tough support.
Further levels below: 1.35, 1.3440 and 1.3350. 1.3440 is of high importance. Above we find 1.3580 and 1.3630.
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