Forex traders will finish the trading week with a heavy dose of PMI data out of the Eurozone. Economists predict a mild uptick, with manufacturing in Germany and the Eurozone as a whole, predicted to remain in a recession. The EURUSD corrected from its 2020 high into its horizontal support area, but what impact will today’s PMI data have on this currency pair? Today’s fundamental analysis will take a look at price action in both directions.
The final market-moving report for this week will come out of the US, which will release PMI data for January. A small improvement is predicted by economists, but regional reports have been weaker than anticipated. With the US Dollar gaining strength over the past three weeks against the Euro, will bears force a breakdown in the EURUSD or can bulls push for more upside? 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:
French Manufacturing PMI, Services PMI, and Composite PMI: The Preliminary French Markit Manufacturing PMI for January is predicted at 50.6. Forex traders can compare this to the French Markit Manufacturing PMI for December, which was reported at 50.4. The Preliminary French Markit Services PMI for January is predicted at 52.2. Forex traders can compare this to the French Markit Services PMI for December, which was reported at 52.4. The Preliminary French Markit Composite PMI for January was reported at 52.0. Forex traders can compare this to the French Markit Composite PMI for December, which was reported at 52.0.
German Manufacturing PMI, Services PMI, and Composite PMI: The Preliminary German Markit Manufacturing PMI for January is predicted at 44.5. Forex traders can compare this to the German Markit Manufacturing PMI for December, which was reported at 43.7. The Preliminary German Markit Services PMI for January is predicted at 53.0. Forex traders can compare this to the German Markit Services PMI for December, which was reported at 52.9. The Preliminary German Markit Composite PMI for January is predicted at 50.5. Forex traders can compare this to the German Markit Composite PMI for December, which was reported at 50.2.
Eurozone Manufacturing PMI, Services PMI, and Composite PMI: The Preliminary Eurozone Markit Manufacturing PMI for January is predicted at 46.8. Forex traders can compare this to the Eurozone Markit Manufacturing PMI for December, which was reported at 46.3. The Preliminary Eurozone Markit Services PMI for January is predicted at 52.8. Forex traders can compare this to the Eurozone Markit Services PMI for December, which was reported at 52.8. The Preliminary Eurozone Markit Composite PMI for January is predicted at 51.2. Forex traders can compare this to the Eurozone Markit Composite PMI for December, which was reported at 50.9.
Here is the key factor to keep in mind today for US Dollar trades:
US Markit Manufacturing PMI, Services PMI, and Composite PMI: The Preliminary US Markit Manufacturing PMI for January is predicted at 52.5. Forex traders can compare this to the US Markit Manufacturing PMI for December, which was reported at 52.4. The Preliminary US Markit Services PMI for January is predicted at 52.9. Forex traders can compare this to the US Markit Services PMI for December, which was reported at 52.8. The Preliminary US Markit Composite PMI for January is predicted at 52.5. Forex traders can compare this to the US Markit Composite PMI for December, which was reported at 52.7.
Should price action for the EURUSD remain inside the or breakout above the 1.1000 to 1.1070 zone the following trade set-up is recommended:
Timeframe: D1
Recommendation: Long Position
Entry Level: Long Position @ 1.1035
Take Profit Zone: 1.1350 – 1.1410
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: 1.0880 – 1.0905
Stop Loss Level: 1.1035
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