EUR/USD Prefers the Weaker Side of PMIs


German PMIs did not come out as expected, but each sector took a different direction. EUR/USD preferred the empty half of the glass.

EUR USD Down on Weaker German Manufacturing December 14 2012

EUR USD Down on Weaker German Manufacturing

The services sector surprised to the upside with a leap from 49.7 to 52.1 points, much better than a small rise to 50 that was expected. The services sector returned to growth.

However, the manufacturing sector surprised to the downside, sliding from 46.8 to 46.3, falling short of a rise to 47.1 that was predicted. This points to a worse contraction. 50 points separate between growth and contraction.

EUR/USD dropped from 1.3110 to 1.2175 before stabilizing. 1.3075 serves as minor support, with 1.3030 following up before 1.30. On the topside, 1.3140 is a limit before the almighty 1.3170.

For more, see the euro to usd forecast.

Other PMIs came out more or less as expected: French manufacturing PMI edged up from 44.5 to 44.6 points, slightly weaker than 44.9 that was expected, and generally weak. France’s services sector advanced from 45.8 to 46 points, a bit better than the same result.

The Manufacturing  PMI for the whole euro-zone came rose from 46.2 to 46.3 points, while services exceeded expectations and jumped from 46.7 to 47.8, much better than 47 that was expected – thanks to German strength in services.

Further reading:

These are Flash purchasing managers’ indices for December. A revision will come afterwards. PMIs are important because they are forward looking indicators.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.