Euro Breaking News: EuroSD bids as PMI data continues to improve. – Rayrice Forex News

Euro Breaking News: EuroSD bids as PMI data continues to improve.

Eurozone PMI Key Points:

  • The latest Eurozone composite output index was at 49.3 (November: 47.8). 5-month max.
  • Final Eurozone services business activity index at 49.8 (November: 48.5). 4-month maximum.

Recommended by Zain Vauda

Get your free Euro forecast

The seasonally adjusted S&P Global Eurozone PMI composite output index was sub-50 for the sixth consecutive month at 49.3, up from 47.8 in November. The data showed the slowest decline since activity levels began to decline last July. In each of the last two surveys, the decline has now softened. Eurozone services PMI business activity index rose to 49.8 in December, down from 48.5 in November, showing a slight decline in the performance of the euro area services sector. Overall, this is the smoothest decline in activity since last August.

Customize and filter live economic data with our DailyFX Economic calendar

Outstanding business volumes fell for the second month in a row as a slowdown in new business allowed companies to focus on orders until completion. Further expansion of employment increased the supply of wealth. The job creation rate, however, was a fraction stronger than the previous 20-month low. Business confidence showed signs of improvement, but inflation eased to 11- and 4-month lows, but increases in input and output prices remained modestly offsetting.

Recommended by Zain Vauda

How to trade EUR/USD

The euro area has shown resilience through the end of 2022, with a number of positive indicators that look set to continue into 2023. Yesterday German inflation data came in with unemployment at -0.8% Vs -0.3% forecast. So are velocity estimates. France’s primary inflation data released earlier today beat estimates of 0.4% MoM by -0.1%, further strengthening the narrative. The improvement in recent data coupled with a slight positive tone to start the year could support the Euro in the near term.

Market response

Euro/Dollar 1H chart

Chart, histogram description is automatically generated.

Source: TradingView, prepared by Zain Vauda

Initial reaction to the data saw EURUSD drop 10 pips before moving higher once again.

We remain in a rising wedge pattern as yesterday’s bearish low failed to break on the daily time frame. As of this morning, we had some 60-pips highs in EURUSD for the day.

IG Customer Sentiment: Bearish

The IG Client Sentiment Data (IGCS) shows that retail traders are currently short on EUR/USD, with 58% of traders holding short positions. At DailyFX we typically take a contrarian view of public sentiment, and traders being short suggests that the EUR/USD price may continue to rise.

— Written by Zain Vauda

Find and follow Zain on Twitter: @zvawda

Leave a Comment