Eurozone PMI Analysis: Manufacturing Gains, Services Slump | Errante
The recent PMI data from Eurozone and the UK paints a mixed picture. The EU PMIs showed recovery signs in manufacturing while services sector weakened. Meanwhile, UK services printed better figures.
German Manufacturing Rebounds, Services Weaken
The German Manufacturing PMI rose to 48.3, posting a 31-month high. This is a third consecutive monthly rise, suggesting a potential turnaround. However, Services PMI dropped to 50.2 reaching a 4-month low. The Composite PMI edged higher to 50.9 versus 50.4 previous.
The manufacturing boost could be attributed to a transient surge in imports amid Trump’s tariffs related factors. However, Germany’s defense package may provide a sustained recovery. ECB policymakers may welcome the eased price pressure in services.
France Struggles to Gain Momentum
French Manufacturing PMI rose to 48.9, beating expectations 46.4. However, it still lies in contraction territory. The Composite PMI gained slightly from last month and came at 47.0. However, business confidence stays weak with subdued jobs and demand conditions. The services sector showed no relief.
Eurozone: Manufacturing Recovery, Services Under Pressure
The Eurozone Manufacturing PMI surpassed expectations and reached 48.7 while Services PMI fell to 50.4, missing expectations and hitting a 4-month low. The Composite PMI remained slightly up at 50.4.
Business confidence stays weak due to weaker demand and geopolitical risks. Employment conditions are stabilizing new business inflows are still soft. Food inflation and US tariffs remain a concern for the ECB.
UK PMI Surprises to the Upside
The UK PMI data showed a strong growth. Services PMI gained to 53.2 beating forecast of 50.9 and previous 51.0. The figures reached a 7-month top. Manufacturing PMI fell to 44.6, missing expectations. The Composite PMI reached 52.0, a 6-month top. However, employment remains under pressure and business confidence is still near 2-year lows.
U.S. PMI Data in Focus
The US is set to release PMI data in few hours which will provide insights to further global economic trends. Manufacturing PMI is expected to ease a little to 51.7 while Services PMI may slightly tick up to 51.2. Any surprise upside can aide dollar to recover.
Technical Analysis
The EUR/GBP pair opened today below Friday’s close, breaking downward with a move of approximately 24 pips and sweeping the 0.8360 area, which coincides with the 76% Fibonacci retracement level of the recent wave. This downward sweep appears to have been a liquidity grab, as the market reversed and pushed higher, indicating strong buyer interest at the 0.8360 zone. Currently, the pair is targeting external liquidity around the 0.83800 level, which serves as a key short-term resistance area. If the pair can break and hold above 0.83800, it could signal further bullish momentum; however, failure to break this level could see the market turn bearish again. Traders should monitor the 0.8360 support and 0.83800 resistance closely for directional cues.
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