Forex traders received a heavy dose of PMI data out of the Eurozone, where the final January readings were reported out of France, Germany, and the whole of the Eurozone. Italy reported preliminary data, and most reports except for France delivered an upside surprise, with France being revised lower. The EURUSD moved into its horizontal support area, how will price action be impacted by US data? Today’s fundamental analysis will take a look at price action in both directions.
Today’s US data will feature the key ISM Non-Manufacturing Index, which is expected to move the US Dollar. The ADP report will offer a first look at what to expect from Friday’s NFP report, where economists expect a slowdown from the previous month’s strong reading. With the EURUSD at a strong support area, will bears continue to pressure this currency pair to the downside, or are bulls ready to step in? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Key Fundamental Factors for the EURUSD
Here are the key factors to keep in mind today for Euro trades:
Italian Services PMI and Composite PMI: The Italian Markit Services PMI for January was reported at 51.4. Economists predicted a figure of 50.5. Forex traders can compare this to the Italian Markit Services PMI for December, which was reported at 51.1. The Italian Markit Composite PMI for January was reported at 50.4. Economists predicted a figure of 49.4. Forex traders can compare this to the Italian Markit Composite PMI for December, which was reported at 49.3.
French Services PMI and Composite PMI: The Final French Markit Services PMI for January was reported at 51.0. Economists predicted a figure of 51.7. Forex traders can compare this to the previous French Markit Services PMI for January, which was reported at 51.7. The Final French Markit Composite PMI for January was reported at 51.1. Economists predicted a figure of 51.5. Forex traders can compare this to the previous French Markit Composite PMI for January, which was reported at 51.5.
German Services PMI and Composite PMI: The Final German Markit Services PMI for January was reported at 54.2. Economists predicted a figure of 54.2. Forex traders can compare this to the previous German Markit Services PMI for January, which was reported at 54.2. The Final German Markit/BME Composite PMI for January was reported at 51.2. Economists predicted a figure of 51.1. Forex traders can compare this to the previous German Markit/BME Composite PMI for January, which was reported at 51.1.
Eurozone Services PMI and Composite PMI: The Final Eurozone Markit Services PMI for January was reported at 52.5. Economists predicted a figure of 52.2. Forex traders can compare this to the previous Eurozone Markit Services PMI for January, which was reported at 52.2. The Final Eurozone Markit Composite PMI for January was reported at 51.3. Economists predicted a figure of 50.9. Forex traders can compare this to the previous Eurozone Markit Composite PMI for January, which was reported at 50.9.
Eurozone Retail Sales: Eurozone Retail Sales for December decreased by 1.6% monthly and increased by 1.3% annualized. Economists predicted a decrease of 1.1% monthly and an increase of 2.3% annualized. Forex traders can compare this to Eurozone Retail Sales for November, which increased by 1.0% monthly and by 2.2% annualized.
Here are the key factors to keep in mind today for US Dollar trades:
US ADP Employment Change: The US ADP Employment Change for January is predicted at 160K. Forex traders can compare this to the US ADP Employment Change for December, which was reported at 202K.
US Trade Balance: The US Trade Balance for December is predicted at -$47.8B. Forex traders can compare this to the US Trade Balance for November, which was reported at -$43.1B.
US Markit Services PMI and Markit Composite PMI: The US Final Markit Services PMI for January is predicted at 53.2 and the US Final Markit Composite PMI is predicted at 53.1. Forex traders can compare this to the previous US Markit Services PMI for January, which was reported at 53.2 and to the previous US Markit Composite PMI, which was reported at 53.1.
US ISM Non-Manufacturing PMI: US ISM Non-Manufacturing PMI for January is predicted at 55.1. Forex traders can compare this to the US ISM Non-Manufacturing PMI for December, which was reported at 55.0. The ISM Non-Manufacturing Business Activity Index for January is predicted at 56.5. Forex traders can compare this to the ISM Non-Manufacturing Business Activity Index for December, which was reported at 57.2.
Should price action for the EURUSD remain inside the or breakout above the 1.1000 to 1.1045 zone the following trade set-up is recommended:
Timeframe: D1
Recommendation: Long Position
Entry Level: Long Position @ 1.1025
Take Profit Zone: 1.1200 – 1.1235
Stop Loss Level: 1.0980
Should price action for the EURUSD breakdown below 1.1000 the following trade set-up is recommended:
Timeframe: D1
Recommendation: Short Position
Entry Level: Short Position @ 1.0980
Take Profit Zone: 1.0820 – 1.0880
Stop Loss Level: 1.1025
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio. Forex trading for beginners often poses a tremendous challenge, take a look at how PaxForex ensures that you are on the right track from your first trade!
